国际英语新闻：Wall Street slumps after peaking

NEW YORK, Nov. 21 (Xinhua) -- U.S. stocks fell for a third straight day on Friday, after hitting 13-month highs Tuesday. The Dow ended the week up 0.5 percent because of steep gains Monday following an improvement in retail sales. The S&P 500 dropped 0.2 percent to cap its first weekly decline since October and the Nasdaq lost 1 percent for the week.

Stock markets have rallied strongly since March's lows as investors speculated on a swifter than anticipated global economic recovery. And U.S. retail sales data Monday, which indicated a 1.4percent jump in consumer spending in October, helped uplift investor optimism about the recovery in the world's largest economy, as consumer spending accounts for two thirds of the U.S. gross domestic product.

    However, there are a number of factors pointed to an imminent correction in stock markets and major indexes lost ground, after the Dow Jones industrial average and the broader Standard & Poor's500 index closed at 13-month highs -- particularly noteworthy was the S&P finally managing to close above 1,100 for the first time in more than a year.

    The dollar was one of the biggest players on the equity market this week. The Dollar Index, which gauges the dollar against a basket of six major currencies, rose four out of the last five sessions after touching a 15-month low on November 16. The U.S. currency gained against all 16 major currencies except the yen.

    The dollar's steady decline since March has encouraged investors to move their money out of the dollar and into higher-yielding assets like stocks and commodities. The strengthening of the dollar, therefore, had a strong negative influence over stock market sentiment. A higher dollar makes U.S. exports less competitive overseas, which hurts corporate earnings, and also tends to depress commodity prices.

    Meanwhile, the S&P 500 rose as much as 64 percent from a 12-year low in March, driven by the huge liquidity injection from governments around the world, improving corporate earnings and economic "green shoots." Many investors are now questioning whether the massive stock rally this year really has been justified given the soft spots in the economy, and so they preferred to retreat to safe harbors such as the greenback and some money managers are stepping away from the market to safeguard their gains.

    Many of the week's economic numbers also made investors cautious. A report Wednesday showed housing starts dropped to the lowest level since April 2009. And the Mortgage Bankers Association posted Thursday that foreclosures on prime mortgages and home loans insured by the Federal Housing Administration rose to three-decade highs in the third quarter, driven by the biggest job losses since the Great Depression. Those figures brought worries that an economic recovery will be slow and bumpy.

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange November 20, 2009.

In addition, although per-share earnings topped the average analyst estimate at 80 percent of S&P 500 companies that have released third-quarter results, mixed earnings from leading players have dented the optimism. The third-largest maker of personal computers Dell, for instance, slid 10 percent Friday after reporting both profit and revenue decreased more than expected. Many investors think stock valuations are now pricing intoo rapid an economic recovery.

    The European Central Bank's president Jean-Claude Trichet also added to market concerns, by saying the European central bank will remove liquidity in order to ensure the bank doesn't fuel inflation. Stocks all over the world slid on speculation that the withdrawal of stimulus plans could make economic rebound in check.

    Traders predict volume will be light again next week because of Thanksgiving. Theodore Weisberg, president of Seaport Securities, said: "The market probably will continue to rise by the end of the year, but I don't think it's gonna climb as fast as it did in recent seven or eight months."