U.S. stocks opened sharply lower and Treasury prices rallied Friday after the government said the economy grew less than forecast in the second quarter and the ongoing political drama in Washington had the nation moving nearer to default. The Dow Jones Industrial Average fell 108 points to 12,131. The Standard & Poor's 500 Index declined 12 points to 1,288. The Nasdaq Composite Index lapsed 25 points to 2,740. Within the first half an hour the selling accelerated in a typical capitulation fashion. A number of disappointing earnings from the likes of Columbia Sportswear, Vistaprint, Ariba, Qlogic, KLA Tencor, Ancestory.com, Arch Coal, and Coventry Health Care are all contributing to the weakness. After the first half an hour the selling abated for a little bit as a few stocks perked up. A number of stocks are trading in the green following earnings including Chesapeake Energy, Metlife, Dole Foods, Newell Rubbermaid, Decker Outdoors, Maxim Integrated, Starbucks, and Amgen. A few other stocks are holding up as well. The defensive stocks that pay big dividends look good. Altria is up a percent on an upgrade. IBM for some reason looks good. The rest of the techs are lower. The commodities are also weak. After the first hour the President spoke causing the averages to dip again, but once he was finished, the averages rebounded a little bit with the Dow down less than 100 points. A silver lining for the moment Through the morning the averages kept improving led by the techs and financials. The Nasdaq moved into the green while the Dow made it back to the unchanged level only to reverse during the lunch hour. During the afternoon the Dow pushed back lower falling over 70 points with the Nasdaq falling back in the red. In the last hour, no rebound. The Dow Jones Industrial Average finished down 96 points at 12,143. It lost 4.2% for the week and 2.2% for July. The S&P 500 fell 8 points to 1,292. It lost 3.9% for the week and 2.2% for the month. The Nasdaq Composite lost 9 points to 2,756. It dropped 3.6% for the week and 0.6% for the month.
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