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Posted: April 12, 2013 2:17 p.m.

Stocks end a four-day advance as energy slides

 

NEW YORK (AP) — A drop in energy and mining companies Friday ended a four-day surge in the stock market.

The Dow Jones industrial average was down 30 points at 14,834 shortly after 2 p.m., a drop of 0.2 percent. In the first four days of the week the Dow rose 300 points, a gain of 2 percent.

The price of crude oil dropped $2.50 to $91 a barrel in New York trading. The International Energy Agency lowered its forecast for global oil demand this year, echoing predictions made earlier this week by OPEC and the U.S. Energy Department.

Gold plunged $64 to $1,501 an ounce, its biggest drop in more than a year and the lowest level since July 2011. Gold has been falling this year as investors anticipate a stronger U.S. economy.

One trigger for the latest plunge was a government report that U.S. wholesale prices fell the most in 10 months in March. The sharp drop in gold futures tugged down mining companies. Barrick Gold lost 7 percent to $23.05, Newmont Mining fell 5 percent to $36.72 and Freeport-McMoRan 3 percent to $31.87.

In other trading, the Standard & Poor's 500 was down seven points, or 0.4 percent, at 1,586. Materials and energy stocks fell the most of the 10 industry groups in the index, 1.7 percent and 1.4 percent.

The Nasdaq composite dropped 11 points, also 0.3 percent, to 3,289.

Major indexes remain on track to end the week with strong gains. For the week, the Dow and the S&P 500 are still up 2 percent.

A handful of reports out Friday also heightened concerns about the economy. Sales at U.S. retailers fell in March and companies restocked their shelves at a much slower pace in February than in the month before. That's usually a sign companies expect weaker spending from consumers and businesses. A measure of consumer sentiment from the University of Michigan also slumped.

The stock market has held up well despite a string of recent reports that point to a weakening economy. That resilience has "left a lot of investors scratching their heads," said Lawrence Creatura, a fund manager at Federated Investors.

This earnings season will likely determine which direction the market takes, Creatura said. Next week, when Bank of America, Google and other big names turn in their quarterly results, could make the difference.

Wells Fargo fell 1 percent to $37.05. Quarterly profits surged for the country's biggest mortgage lender, but revenue slumped below Wall Street's forecasts.

The weaker economic reports pushed traders into the safety of Treasurys. In the market for U.S. government bonds, the yield on the 10-year Treasury note dropped to 1.72 percent from 1.79 percent late Thursday.

Investors seem to be in the habit of brushing off any worrying news this year, Creatura said. Recent threats from North Korea, for instance, have rattled South Korean markets. The country's main index, the KOSPI, has lost 4 percent over the past month. But any concerns have yet to shake U.S. markets. South Korea may be the seventh-largest trading partner of the U.S., but most investors see North Korea's bellicose talk as more bluff, Creatura said. Everything could change, however, if war looked likely.

"We're following the situation," he said. "It's part of our job. But just because there hasn't been a reaction so far doesn't mean we'll overlook really bad news."

Among other companies making moves Friday:

— M&T Bank lost 4 percent to $100.29. The bank said it had to delay its merger with Hudson City Bancorp after the Federal Reserve flagged the bank's compliance with money-laundering rules.

— Evertec gained 4 percent in its first day as a publicly traded company. The payment processer raised more than $500 million in its initial public offering, with its shares priced at $20. Evertec's stock rose 78 cents to $20.78.

 
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