S&P 500 Poised for First Weekly Drop Since Sept.

U.S. stocks fell, sending the Standard & Poor’s 500 Index toward its first weekly drop since September, as concern about European financing offset an unexpected decrease in the American unemployment rate.

All 10 groups in the S&P 500 slid as financial and industrial shares had the biggest losses. Bank of America Corp. (BAC) tumbled 4.8 percent as a plan to bolster its balance sheet renewed concern that shareholders may see their stakes diluted. American International Group Inc. (AIG) slumped 4.3 percent after the bailed-out insurer posted its biggest loss since 2009. Groupon Inc. advanced 45 percent in its initial day of trading.

The S&P 500 sank 1.3 percent to 1,245.08 as of 12:40 p.m. New York time. The benchmark gauge for American equities was down 3.1 percent this week. The Dow Jones Industrial Average slumped 150.15 points, or 1.3 percent, to 11,894.32 today.

“Today’s jobs report does little to alleviate concern,” Mohamed A. El-Erian, the chief executive officer at Pacific Investment Management Co. in Newport Beach, California, said in an e-mail. His firm runs the biggest bond fund. “Initial indications suggest that G-20 leaders are having difficulties agreeing on the relatively easy items on their agenda. This bodes badly for the more difficult issues that also need coordinated measures on the part of the G-20.”

Global stocks slumped as the Group of 20 nations failed to agree on increasing the resources of the International Monetary Fund, dashing the hopes of European governments keen to tap more foreign aid. In the U.S., the unemployment rate fell to a six- month low of 9 percent from 9.1 percent, even as the labor force expanded. The 80,000 increase in payrolls followed gains in the prior two months that were revised up by 102,000.
‘Bottom Line’

“The bottom line is we’re making progress on the jobs front, but not enough to offset concerns about Europe,” Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co., said in a telephone interview. “The jobs report was reasonably good, especially when you throw in the revisions. Still, Europe is a story that doesn’t go away.”

The S&P 500 rose for a second day yesterday as Greece moved closer to accepting a bailout and the European Central Bank unexpectedly lowered interest rates. Earlier this week, a two- day slump sent the S&P 500 to the level where three rallies stopped in August and September, the top of a price range that prevailed for 10 weeks. The index rose above that level last week amid progress on Europe’s bailout plans.

American banks slumped, following a tumble in European lenders. The KBW Bank Index dropped 2 percent as all its 24 companies declined.
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