Investing.com - U.S. stocks moved lower Friday, as concerns over European debt found new ammunition following the announced resignation of a key member of the European Central Bank Governing Council.
In late afternoon U.S. trade, the Dow Jones Industrial Average dropped 2.76% to 10,983.06, the Nasdaq Composite Index fell 2.59% to 2,462.68, and the S&P 500 gave up 2.75% to trade at 1,152.26.
EU council member Jeurgen Stark, earlier Friday, announced plans to step down from his post, reportedly over disagreement with ECB officials on the central bank’s resumption of its bond buying program.
Last month, it was widely reported that Stark was opposed to the ECB’s resumption of the program where it purchased large amounts of Spanish and Italian debt in an effort to curb the spread of debt contagion in the euro-zone.
Stark, a member of the Executive Board and Governing Council since June of 2006, and a former vice president of the Bundesbank, was the second German to resign his post this year.
European shares finished Friday trading sharply lower, with the STOXX 50 Index slumping 4.15% to 2,073.67, France’s CAC fell 3.6% to 2,974.59, Britain’s FTSE gave up 2.35% to 5,214.65, and Germany’s DAX surrendered 4.04% to close at 5,189.93.
Elsewhere, U.S. President Barack Obama’s proposed USD447 billion economic stimulus package, including tax cuts and other incentives, was met with measured skepticism by market investors.
While some details of the proposal appealed to the market, particularly payroll tax reductions, passage of the deal was expected to face a tough challenge in the U.S. House of Representatives where opposition Republicans hold the majority.
Banking shares were among slumping issues in Friday trade, including Dow component Bank of America Corp. which the Wall Street Journal reported was prepared to slash 40,000 jobs in the first phase of its restructuring plan.
Bank of America fell 2.9%.
McDonald’s Corp. sank 4.7% after the fast-food giant reported August sales well below market expectations.
Research in Motion retreated a hefty 6.1% following a downgrade to the company’s stock by Jeffries & Co. due to lackluster sales of handsets incorporating the new Blackberry 7 operating system.
Bucking the session trend, newspaper publisher Lee Enterprises Inc. leapt 15% after the firm reached agreement with debt holders on an extension of loan maturities.
Market attention was expected to focus on next week’s monthly report from the European Central Bank, as well as the scheduled release of a host of U.S. economic data.