U.S. markets fell sharply Friday following a government report that consumer spending decreased in September. Consumer spending accounts for roughly 70 percent of the U.S. economy.
The three major indexes were down more than 2 percent in midday trading.
The Dow Jones Industrial Average was down 234.36 points, to 9,728.22. The broader Standard & Poor’s 500-stocks Index was at 1,038.98, down 27.13 points. And the tech-heavy Nasdaq was down 48.48 points, to 2,049.07.
The Commerce Department reported consumer spending fell 0.5 percent in September. Though the number matched analysts’ expectations, the decrease was the largest in nine months and followed a 1.3 percent increase in August.
The losses followed strong gains Thursday that came after a U.S. government report showed the economy grew in the third quarter at an annual pace of 3.5 percent — after declining for four straight quarters. The Dow gained 199.89 points.
Among the biggest losers Friday are bank and energy stocks.
Brian Lipps, a Washington-area branch manager for Charles Schwab & Co., thinks investors are indeed reacting to the consumer spending report but said the bigger picture is that investors were “ready for a breather” after the Dow broke 10,000.
He also said banks stocks losing is no surprise because they have gained the most recently. He said energy stocks are down because the price of crude oil fell Friday. The price of crude fell to $77.30 a barrel in midday trading — $2.57 less than where it closed Thursday on the New York Mercantile Exchange.
Investors will next week look at another major economic indicator — the U.S. unemployment rate for October. The current rate is 9.8 percent but it is expected to crest at 10 percent by the end of the year.
In overseas trading, Japan’s Nikkei stock average increased 1.5 percent. Britain’s FTSE 100 fell 1.8 percent, Germany’s DAX index decreased 3.1 percent, and France’s CAC-40 decreased 2.9 percent.
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