New York - — The stock market recorded its biggest weekly drop in three months as a feeling of malaise took over after the United States failed to rally world leaders to come up with plans to strengthen global growth.
"The G-20 wasn't much of a success for the U.S.," said Kim Caughey Forrest, equity research analyst at Fort Pitt Capital Group. "There's a sense that nobody really has the ideas on how to get us out of here."
On Friday, stocks and commodities took another nosedive on worries that China might put the brakes on its surging economy. Any cooling of China's economy would slow down demand for raw materials, and that possibility sent prices of oil, metals and grains tumbling.
The Dow Jones industrial average fell 90.52, or 0.80 to 11,192.58, led by sharp losses in energy and materials stocks. Construction giant Caterpillar Inc., which has huge operations in China, fell 1.40 percent to $81.04 and oil company ExxonMobil Corp. fell 0.84 percent to $70.99.
For the week, the Dow was off 2.2 percent, its seventh-largest weekly drop this year and its biggest weekly fall since the week ending Aug. 13.
The Standard & Poor's 500 index fell 14.43, or 1.2 percent, to 1,199.21, while the Nasdaq composite index fell 37.31, or 1.5 percent, to 2,518.21.
The Chinese government said that the pace of inflation hit a more than two-year high in October. The markets took that as a signal that China would raise rates to tamp down inflation. It led to a sell-off in global markets, from China to the United States. The Shanghai composite index plummeted 5.2 percent, while Hong Kong's Hang Seng fell 1.9 percent.
Gold fell $37.80, or 2.7 percent, to $1,365.50 an ounce. Crude oil fell $2.93, or 3.3 percent, to $84.88 a barrel, while soybeans plummeted 70 cents, or 5.2 percent, to $12.69 a bushel.
China's robust economy has helped offset sluggishness in developed markets like the United States and Europe. Many companies, like Caterpillar and McDonald's Corp. have credited international sales, particularly in China, as a reason earnings have been strong.
The speculation about a rate increase in China came as little headway was made on a plan to strengthen global growth. Leaders from the Group of 20, which includes large developed and emerging economies, failed to agree on policies about trade and currency manipulation that could stoke protectionism and a trade war.
Other nations refused to endorse a plan the United States presented to force China to allow the value of its currency to rise. The United States argues that China is keeping the value of its currency artificially low because a weak currency makes exports cheaper and more attractive globally. That, in turn, gives China an unfair advantage in global markets, helping its economy at the expense of others.
The dollar resumed its slide against other major currencies. It had rallied in recent days, particularly against the euro, as Ireland's debt crunch renewed worries about the European financial system. A fiscal crisis in Greece this spring helped bring down stocks around the world, and investors are hoping Ireland can right its own finances without having to seek a bailout as Greece did.
"The G-20 wasn't much of a success for the U.S.," said Kim Caughey Forrest, equity research analyst at Fort Pitt Capital Group. "There's a sense that nobody really has the ideas on how to get us out of here."
On Friday, stocks and commodities took another nosedive on worries that China might put the brakes on its surging economy. Any cooling of China's economy would slow down demand for raw materials, and that possibility sent prices of oil, metals and grains tumbling.
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For the week, the Dow was off 2.2 percent, its seventh-largest weekly drop this year and its biggest weekly fall since the week ending Aug. 13.
The Standard & Poor's 500 index fell 14.43, or 1.2 percent, to 1,199.21, while the Nasdaq composite index fell 37.31, or 1.5 percent, to 2,518.21.
The Chinese government said that the pace of inflation hit a more than two-year high in October. The markets took that as a signal that China would raise rates to tamp down inflation. It led to a sell-off in global markets, from China to the United States. The Shanghai composite index plummeted 5.2 percent, while Hong Kong's Hang Seng fell 1.9 percent.
Gold fell $37.80, or 2.7 percent, to $1,365.50 an ounce. Crude oil fell $2.93, or 3.3 percent, to $84.88 a barrel, while soybeans plummeted 70 cents, or 5.2 percent, to $12.69 a bushel.
China's robust economy has helped offset sluggishness in developed markets like the United States and Europe. Many companies, like Caterpillar and McDonald's Corp. have credited international sales, particularly in China, as a reason earnings have been strong.
The speculation about a rate increase in China came as little headway was made on a plan to strengthen global growth. Leaders from the Group of 20, which includes large developed and emerging economies, failed to agree on policies about trade and currency manipulation that could stoke protectionism and a trade war.
Other nations refused to endorse a plan the United States presented to force China to allow the value of its currency to rise. The United States argues that China is keeping the value of its currency artificially low because a weak currency makes exports cheaper and more attractive globally. That, in turn, gives China an unfair advantage in global markets, helping its economy at the expense of others.
The dollar resumed its slide against other major currencies. It had rallied in recent days, particularly against the euro, as Ireland's debt crunch renewed worries about the European financial system. A fiscal crisis in Greece this spring helped bring down stocks around the world, and investors are hoping Ireland can right its own finances without having to seek a bailout as Greece did.
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