Commodity-related shares led U.S. stocks lower on Friday in a shortened post-holiday session as investors unloaded risky assets on worries that euro-zone debt problems may spread.
Consumer stocks were also a major focus as Black Friday, often the biggest shopping day of the year, began what is expected to be the strongest holiday shopping season in three years.
While strong sales on Black Friday, when many retailers move into the black, could give a boost to stocks next week, Europe’s shaky finances may temper any gains.
The U.S. dollar rallied while the euro slid to a new two-month low amid fears that Portugal and Spain could follow Ireland in needing bailouts to shore up their economies.
The S&P materials index dropped 1.2 percent as key base metals prices fell, pressured by the advancing greenback and after the Shanghai Futures Exchange raised margin requirements, prompting liquidation of speculative positions..
Freeport McMoRan Copper & Gold dropped 2.6 percent to $98.07.
“There are concerns from euro land, and sharp selloffs in large European banks kind of set the tone for the day,” said Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut.
The S&P financial index fell 1.1 percent, with Bank of America down 1.2 percent at $11.14.
The Dow Jones industrial average dropped 95.28 points, or 0.85 percent, to end at 11,092. The Standard & Poor’s 500 slipped 8.95 points, or 0.75 percent, to 1,189.40. The Nasdaq Composite lost 8.56 points, or 0.34 percent, to 2,534.56.
For the week, the Dow dropped 1 percent and the S&P 500 fell 0.86 percent, but the Nasdaq Composite gained 0.65 percent. U.S. markets were closed on Thursday for Thanksgiving Day.
Investors were further rattled Friday after China warned against military acts near its coastline ahead of U.S.-South Korean naval exercises. Earlier, North Korea had said those naval drills risked pushing the region toward war. The North shelled a South Korean island on Tuesday.
Retail shares were sluggish despite the upbeat sentiment over Black Friday. Discount retailers Wal-Mart Stores Inc fell 0.5 percent to $53.74 and Target Corp shed 0.6 percent to $56.88.
But Macy’s Inc, operator of its namesake retail chain and upscale Bloomingdale’s, edged up 0.4 percent to $26.
“The (Black Friday) data that has been leaking seems to be better than expected, and after two years of miserable performance at the malls, there seems to be some pent-up demand,” Weeden & Co’s Goldman said.
Del Monte Foods Co rose 4.5 percent to $18.80 a day after the company agreed to a buyout led by Kohlberg Kravis Roberts & Co..
The U.S. stock market closed three hours early at 1 p.m. (1800 GMT) a day after the Thanksgiving holiday.
The shortened session saw 2.82 billion shares exchange hands on the New York Stock Exchange, the American Stock Exchange and Nasdaq. The year-to-date average volume of a full session is 8.65 billion shares.
Declining stocks outnumbered advancing ones on the NYSE by a ratio of slightly more than 2 to 1, while on the Nasdaq, about seven stocks fell for every four that rose.
