Weekend Economists American Bad Boys Part 1 July 12-13, 2014

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32. S&P 500 Has Worst Week Since April on Europe, Valuations

http://www.bloomberg.com/news/2014-07-11/s-p-500-has-worst-week-since-april-on-europe-valuations.html

The Standard & Poor’s 500 Index completed its worst week since April, as signs of financial stress in Europe and speculation the recent rally is overdone pulled stocks down from record levels.

Netflix Inc. retreated 6.9 percent as Internet stocks tumbled with small-cap shares. JPMorgan Chase & Co. and Wells Fargo & Co. slid at least 2.2 percent as concern about corporate debt in Portugal weighed on bank shares. Equity declines led to a surge in volatility after a gauge of investor fear had fallen to a seven-year low. Alcoa Inc. rose 6.6 percent amid the start of corporate earnings season.

The S&P 500 slumped 0.9 percent to 1,967.57 for the five days, after closing at an all-time high on July 3. The Dow Jones Industrial Average lost 124.45 points, or 0.7 percent, to 16,943.81, after topping 17,000 (INDU) for the first time during the previous week. The Russell 2000 Index tumbled 4 percent, its worst weekly showing in more than two years.

“This Portugal news, while in and of itself isn’t going to bring down the European economy, is a reminder that things aren’t fixed yet,” Jordan Irving, co-founder of Conshohocken, Pennsylvania-based Irving Magee Investment Management, said in a phone interview. The firm manages $225 million in assets. “Things may be more tenuous than investors believe, and some bets are off the table.”