NEW YORK — Stocks on Friday dropped for a second day, with payrolls at a standstill in August, prompting investors to worry whether the country can overcome partisan gridlock on Capitol Hill to deal with its economic challenges.
“Today’s data puts the ball in the House’s hand. What can they say in response to the president’s plan for job growth? ‘No, we don’t want jobs, we want deficit cuts?’ ” wrote Elliot Spar, market strategist at Stifel Nicolaus, in a e-mailed commentary.
While there is much disagreement about whether the Federal Reserve should do more, Brad Sorensen, director of market and sector analysis at Charles Schwab, said his firm would prefer that the central bank stay on the sidelines.
“There is already plenty of liquidity in the economy, and the earnings season was good, companies certainly haven’t overhired or overextended themselves, so the corporate side is looking pretty good,” he added.
The Dow Jones industrial average finished the session down 253.31 points, or 2.2 percent, at 11,240.26, logging a 0.4 percent weekly slide.
All 30 Dow components fell, with Bank of America off 8.3 percent and JPMorgan Chase down 4.6 percent, after The New York Times reported the lenders to be among the big financial institutions facing lawsuits by the Federal Housing Finance Agency for misrepresenting the quality of mortgage securities sold at the peak of the housing bubble.
The S&P 500 declined 30.45 points, or 2.5 percent, at 1,173.97, with the financial sector slammed the hardest among the benchmark’s 10 industry groups.
Netflix shares fell 8.6 percent after Starz cable network halted contract-renewal negotiations with the online movie-rental firm.
The Nasdaq composite dropped 65.71 points, or 2.6 percent, at 2,480.33 — almost flat for the week.
The Labor Department reported payrolls were unchanged for the month, while the jobless rate held at 9.1 percent, as the first downgrade of the country’s credit, political bickering over the U.S. budget and worries about European debt had companies and consumers alike curbing expenditures.
