Stocks on Friday plunged after protests in Egypt intensified and President Hosni Mubarak imposed a nationwide curfew, overshadowing a report that growth in U.S. gross domestic product accelerated in the fourth quarter.
The Dow Jones industrial average closed down 166.13 points, or 1.39%, at 11,823.70; the S&P 500 fell 23.20 points, or 1.79%, ending at 1,276.34; and the Nasdaq composite closed down 68.37 points, or 2.48%, at 2,686.91. All numbers are preliminary.
The Dow had risen 1% this week, supported by higher-than-estimated earnings. Investors pushed the Dow above 12,000 in intraday trading on Wednesday and Thursday for the first time since 2008.
Protesters in Cairo clashed with police who demanded that Mr. Mubarak resign. Tens of thousands of marchers chanted “liberty” and “change” at rallies throughout the Egyptian capital.
“The unrest in Egypt has people concerned,” said Mark Bronzo, who helps manage more than $25 billion at Security Global Investors. “When it comes to the Middle East, there's worries the unrest is going to spread. It has negative implications for the world.”
Earlier Friday, the federal government reported that GDP expanded at a 3.2% annual pace in the fourth quarter, up from 2.6% during the prior three months, as consumer spending climbed by the most in more than four years.
The Chicago Board Options Exchange Volatility Index, which measures the cost of insurance against losses in U.S. stocks, jumped 20%.
Oil surged the most since September 2009 over concern that the unrest in Egypt would spread to major oil-producing parts of the Middle East. Oil for March delivery increased $3.70 to settle at $89.34 a barrel on the New York Mercantile Exchange.
Egypt is home to the Suez Canal, through which 1 million to 1.6 million barrels a day of oil and refined products moved north to Europe and other developed economies in 2008 and 2009, according to the Energy Information Administration, the statistical arm of the U.S. Energy Department.
Any disruption to Middle East oil supplies “could actually bring real harm,” Energy Secretary Steven Chu said Friday on a conference call.