U.S. Stock Markets Post Largest Weekly Losses Since March 2009 AsEurope Panics

DailyMarkets.com (New York) - U.S. stock markets had a poor performance last week on the back of the debt crisis in Greece. Both the Dow and the S&P 500 index posted the largest weekly losses since March 2009. For the week, the S&P 500 fell 6.4% to 1,110.86, and the Dow slid 5.7% to 10,380.43, the lowest level since February. After a stellar first-quarter showing, both indices have now erased their gains for the year. The Dow is now down 0.5% for the year, while the S&P 500 is now down 0.4% year-to-date. The Chicago Board Options Exchange Volatility Index, also known as the VIX (^VIX: 40.95 +8.15 +24.85%), jumped a whopping 86% to 40.95 - the largest weekly increase ever in its 20-year history.

On Thursday May 6th, the Dow tumbled almost 1,000 points or 9.2% intraday before paring its losses. That was the steepest drop since the stock market crash of 1987, and it wiped off US$700 billion from U.S. markets in just eight minutes. Waves of electronic selling in Accenture (ACN: 40.32 -0.77 -1.87%), Exelon (EXC: 41.54 -0.32 -0.76%) and Philip Morris (PM: 46.42 -0.58 -1.23%) caused losses of more than 90% to cents before rebounding within minutes. Almost 1.3 billion shares traded on U.S. markets in a 10-minute period beginning at 2:40 p.m., six times the average. This surge in volume, coupled with a slowdown in trading on the NYSE, caused volatility to spike as sell orders were routed to other smaller exchanges that had few if any buyers.

Apple (AAPL: 235.86 -10.39 -4.22%) shares fell 9.7% to $235.86, its largest weekly loss since October 2008, after Nokia, the world's biggest maker of mobile phones, filed a patent-infringement lawsuit over the smartphone technology in iPhone and iPad. This fifth lawsuit was the latest in a series of lawsuits and counter-lawsuits between the two technology companies in the past year. Dow Chemical (DOW: 25.50 -1.18 -4.42%), the biggest U.S. chemical maker, fell 17% to $25.50, the most since January 2009.

Next week, Walt Disney (DIS: 33.41 -0.60 -1.76%), the world's largest media company, and Cisco Systems (CSCO: 24.71 -0.778 -3.05%), the world's biggest maker of computer networking equipment will report quarterly earnings, along with retailers such as Macy's (M: 21.94 -0.48 -2.14%), Nordstrom (JWN: 40.06 -0.50 -1.23%), J.C. Penney (JCP: 27.61 -0.49 -1.74%) and Whole Foods Market (WFMI: 36.68 -1.41 -3.70%).

In forex trading, the Euro fell 4.1% against the US dollar, the largest weekly loss since October 24, 2008, to 1.2755 on concerns the ECB may not be able to handle the Greek crisis on its own. However, the Euro rallied 1.1% on Friday, its first gain in a week, on speculation that the European Central Bank (ECB) may come to the aid of banks threatened by Greece's crisis in an effort to halt contagion. USD/JPY fell 2.4% to 91.59 for the week, the biggest drop since February, from 93.85.

The British pound hit a 13-month low of 1.4477 against the US dollar as Conservative David Cameron failed to win a majority in the House of Commons, leading to concerns that the U.K. would be unable to manage its fiscal deficit. For the week it fell 3.1% to 1.4795, from 1.5274.