Stocks Slide Amid Trading-Systems Concern

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Stocks slid for a fourth day, erasing 2010 gains for U.S. benchmark gauges, and the bonds of debt- laden nations tumbled after Europe’s debt crisis spurred an equity rout yesterday that undermined confidence in trading systems. Oil sank, capping the biggest weekly drop since 2008.

The Standard & Poor’s 500 Index fell as much as 3 percent before paring losses to 1.5 percent at the 4 p.m. New York close, leaving it down 0.4 percent in 2010. The MSCI World Index sank 2.3 percent. The Stoxx Europe 600 Index fell 3.9 percent to the lowest level since November. Greece led a drop in deficit- stricken European nations’ bonds, with the yield premium demanded to own the 10-year securities instead of benchmark German bunds rising to a record 9.65 percentage points.

Regulators are reviewing a plunge that briefly wiped out more than $1 trillion in U.S. equity value yesterday as the Dow Jones Industrial Average slid almost 1,000 points before paring losses. Concern over the integrity of the trading mechanisms that may have exacerbated the drop overshadowed the biggest growth in U.S. jobs in four years. Credit-default swaps on European banks surged to an all-time high and the benchmark gauge of U.S. stock volatility capped a record weekly gain.

The Dow ended down 139.89, or 1.3 percent, to close at 10,380.43. For the week, the Dow lost 630 points, or 5.7 percent, its worst weekly percentage drop since last March.

(Source: CNBC / Bloomberg)