NEW YORK — U.S. stocks fell Friday, with the major indexes all hit with weekly losses of 1 percent and more, as the financial sector spouted more leaks after American International Group Inc. reported a $7.8 billion loss and Citigroup Inc. unveiled plans to shed about half a trillion dollars in assets.
“AIG is a reminder that while the bulk of the stock market is in good shape, the financials and consumer discretionary stocks are still having some difficulties,” said Phil Orlando, equity market strategist at Federated Investors.
Down more than 300 points on the week, the Dow Jones industrial average fell 120.90 points, or 0.9 percent, to end at 12,745.88, with the blue-chip index shedding 2.4 percent from the prior Friday’s finish.
Of the Dow’s 30 components, 26 ended with losses, led by AIG and its 8.8 percent decline, following its larger-than-forecast loss, which led Standard & Poor’s and Fitch to cut the insurance giant’s credit rating.
Also weighing on the Dow was Citigroup, off 1.8 percent on word the banking institution would sell or downsize pieces of its sprawling empire.
The broader indexes also lost ground, with the S&P 500 shedding 9.4 points, or 0.7 percent, to 1,388.28, giving it a weekly loss of 1.8 percent.
Materials led S&P sector declines, off 1.3 percent, followed by consumer staples, down 0.9 percent, and financials, down 0.7 percent.
Only two sectors on the S&P gained: telecommunication services, up 0.9 percent, and utilities, ahead 0.7 percent.
And, with no end in sight to strong demand for diesel fuel and worries about global supplies, crude-oil futures for June delivery climbed as high as $126.25 a barrel on the New York Stock Exchange. It closed below the high — at $125.96, up $2.27 for the session.
The rising price of crude is “having a negative impact on consumer spending, with a spike in both crude and food, which is having a destabilizing effect on the GDP as it relates to consumer spending — it’s a wakeup call,” said Orlando.
And crude isn’t the only commodity seeing a price run-up, with the devastating cyclone in Myanmar adding to concern about supplies of rice, because the country is among the larger producers of paddy rice.
The Nasdaq Composite dropped 5.72 points, or 0.2 percent, to 2,445.52, a drop of 1.3 percent from the previous Friday’s close.
Volume on the New York Stock Exchange neared 3.5 billion, with declining stocks outgunning advancers by a ratio of 8-to-7. On the Nasdaq, more than 1.7 billion shares were exchanged, and decliners edged ahead of advancers by an 8-7 ratio.
Ahead of the opening bell, stock index futures had trimmed losses after the Commerce Department reported a sharp drop in exports as well as imports, driving the trade deficit down to $58.2 billion.
