With traders expressing continued concerns about the outlook for the global economy, stocks saw substantial weakness during trading on Friday. The markets moved back to the downside after seeing a brief respite from the recent selling pressure in the previous session.
The major averages ended the day sharply lower, at their worst closing levels in well over two months. The Dow plunged 172.45 points or 1.4 percent to 11,951.91, the Nasdaq sank 41.14 points or 1.5 percent to 2,643.73 and the S&P 500 plummeted 18.02 points or 1.4 percent to 1,270.98.
The steep losses on the day contributed to another week of losses for the major averages. The Dow fell by 1.6 percent for the week, while the Nasdaq and the S&P 500 posted weekly losses of 3.2 percent and 2.2 percent, respectively.
The considerable weakness on Wall Street was partly due to disappointing economic news from overseas, with a report from the Chinese Customs Office showing a narrower than expected Chinese trade surplus.
While the report showed that the Chinese trade surplus widened to $13.05 billion in May from a surplus of $11.4 billion in April, economists had been expecting a surplus of $19.8 billion.
The report also showed that Chinese exports rose at an annual rate of 19.4 percent in May, notably slower than the 29.9 percent growth reported for the previous month. The slower export growth raised concerns about global consumption.
In U.S. economic news, a report released by the Labor Department showed that import prices edged up by 0.2 percent in May following a 2.1 percent jump in April. A 0.2 percent drop in prices for imported fuel limited the upside for import prices.
The report also showed that export prices rose by 0.2 percent in May after advancing by 0.9 percent in the previous month. Prices for agricultural exports fell by 2.0 percent after rising in each of the nine previous months.
Among individual stocks, Diodes (DIOD) fell sharply after it lowered its gross margin guidance for the second quarter. The company cited a mix shift due to softening demand and a slower than expected recovery from manpower shortages at its Chinese packaging facilities.
Toyota (TM) also ended the day in the red after the auto giant said it expects sharply lower profits in its first-half and fiscal year 2012, reflecting the anticipated decline in vehicle sales due the ongoing impact of the earthquake in Japan.
Meanwhile, National Semiconductor (NSM) closed modestly higher after reporting fourth quarter earnings of $0.26 per share on sales that fell 6 percent to $374.1 million. Analysts had expected the company to earn $0.27 per share on sales of $365.1 million.
Sector News
Oil service stocks turned in some of the market's worst performances on the day, resulting in a 2.7 percent loss by the Philadelphia Oil Service Index. With the loss, the index ended the session at its worst closing level in well over four months.
The weakness among oil service stocks came amid a sharp drop by the price of crude oil, with crude for July delivery falling $2.64 to $99.29 a barrel amid news that Saudi Arabia plans to increase oil production.
Considerable weakness was also visible among health insurance stocks, which moved back to the downside after helping to lead the markets higher in the previous session. After rising 2.7 percent on Thursday, the Morgan Stanley Healthcare Payor Index fell by 2.2 percent.
Most of the other major sectors also showed significant moves to the downside on the day, reflecting broad based selling pressure. Commercial real estate, networking, and biotechnology stocks posted particularly steep losses.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Friday. Japan's benchmark Nikkei 225 Index advanced by 0.5 percent, while Hong Kong's Hang Seng Index fell by 0.8 percent.
Meanwhile, the major European markets all showed notable moves to the downside over the course of the trading day. The French CAC 40 Index fell by 1.9 percent, while the U.K.'s FTSE 100 Index dropped by 1.6 percent and the German DAX Index closed down by 1.3 percent.
In the bond market, treasures ended the day on upside amid the concerns about the economic outlook. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.7 basis points to 2.971 percent.
Looking Ahead
Next week, traders will be presented with a slew of economic data, including key reports on retail sales, housing starts and consumer and producer prices.
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May 08, 2026 15:50 ET Manufacturing and services sector survey results and labor market data from main economies were the highlight on the economics news front this week. Factory orders and jobs report dominated the news flow in the U.S. Similarly, industrial production data from German garnered attention in Europe. In Asia, purchasing managers’ survey results from China and the central bank decision from Australia were in focus.