DOW

Dow

11,240.26

-253.31

-2.20%

YF New Market Update

4:25 pm : Aggressive selling on Friday extended a slide that started on Thursday. That effectively erased gains staged in the first half of the week, giving the stock market a fractional weekly loss.

An upward trend carried stocks higher at the start of the week. Buyers were encouraged by signs of improved sentiment in Europe, where news of consolidation in Greece's banking industry was regarded as a step toward stabilizing the country's banking system. Stocks even overcame an abysmal Consumer Confidence Index reading of 44.5 for August; it was the worst level for the Index since April 2009.

Stocks climbed in seven out of eight sessions for a cumulative gain of more than 8% before becoming winded on Thursday, when the stock market attempted to bounce in response to a better-than-expected August ISM Manufacturing Index reading of 50.6. The move failed to hold when the S&P 500 encountered resistance near the 1230 zone, which marks the 50% retracement level between the July high and August low. Some conceived that the better-than-expected ISM reading, though relatively neutral on its own, could stand as evidence against the case for further monetary policy.

Speculation about a third round of quantitative easing has been rampant, but minutes from the most recent FOMC meeting failed to make note of any such plans. Instead, only a mention of the Fed's intent to monitor conditions and take action, if determined necessary, was made.