S&P 500 Caps First Weekly Drop Since Sept.

U.S. stocks fell, driving the market to its first weekly drop since September, as Greece’s reluctance to accept another bailout and a disagreement over boosting the International Monetary Fund’s resources threatened Europe’s efforts to halt its debt crisis.

All 10 groups in the S&P 500 fell this week as financial stocks plunged 5.4 percent. Jefferies Group Inc. (JEF) retreated 18 percent amid concern about its investments in Europe while Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) dropped more than 7.4 percent. Abercrombie & Fitch Co. (ANF) plunged 24 percent, its biggest loss in three years, after the teen-clothing retailer said sales fell at flagship stores in Europe last quarter.

The S&P 500 slid 2.5 percent to 1,253.23, the first weekly decline since the period ended Sept. 30. The benchmark equity index dropped 2.5 percent on Oct. 31, trimming the measure’s biggest monthly rally since 1991 to 11 percent. The Dow Jones Industrial Average (INDU) retreated 247.87 points, or 2 percent, to 11,983.24 this week.

Stocks declined because of “the ping-pong match going on in Greece,” Chris Hyzy, the New York-based chief investment officer at U.S. Trust Co., which oversees about $360 billion, said in telephone interview. “Investors are very concerned about what that means for counterparty risk around the world and then ultimately how that factors into the broader economy and profits.”
Greek Referendum

Equities plunged worldwide on Oct. 31 and Nov. 1 after Greek Prime Minister George Papandreou scheduled a referendum on the European Union’s expanded rescue plan, spurring concern the deal will unravel. After rallying two straight days, the S&P 500 dropped yesterday when the G-20 disagreed on increasing the IMF’s resources, fueling pessimism European leaders won’t have enough aid to bail out indebted nations. Stocks had rallied throughout October on optimism the crisis would ebb.

After U.S. exchanges closed yesterday, Papandreou won a confidence vote in parliament. He will now attempt to shore up support for an international rescue after Greece’s main opposition party rejected his offer to form a new government.

The S&P 500 lost 0.6 percent yesterday even after the U.S. jobless rate fell to a six-month low of 9 percent. Economists projected the figure would remain at 9.1 percent, according to the median projection in a Bloomberg survey. Payrolls increased by 80,000 in October, missing the economist forecast of 95,000, following gains in the prior two months that were revised up by 102,000, U.S. Labor Department figures showed.
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