NEW YORK – A four-day surge in the stock market came to an end on Friday as falling commodity prices brought down energy and mining companies.
Signs of a slowing economy rattled commodity markets. The price of crude oil dropped 2 percent to $91 a barrel as weak U.S. economic reports followed forecasts for weaker oil demand.
Gold plunged $64 to $1,501 an ounce, reaching its lowest level since July 2011. One trigger for the latest plunge was a government report that U.S. wholesale prices fell the most in 10 months in March. Traders tend to sell gold when inflation wanes. Traders also pushed gold prices lower on reports that Cyprus may sell some of its gold reserves, possibly prompting other weak European countries like Italy and Spain to do the same.
Compared to commodities markets, the stock market looked stable. The Dow Jones industrial average dropped just 0.08 of a point to close at 14,865.05. The Standard & Poor’s 500 lost 4.52 points, or 0.3 percent, to 1,588.85.
The two major indexes finished the week with strong gains: The Dow rose 2.1 percent, the S&P 500 rose 2.3 percent.
David Joy, the chief market strategist for Ameriprise Financial, said it’s as if the stock market is telling a different story from the bond and commodity markets. Copper and other industrial metals slid along with gold on Friday, while Treasury yields sank near their lows for the year. He said both imply traders in those markets are more worried about a slowdown.
“It gives me pause,” Joy said. “Commodities and bonds are telling stock investors: don’t be in such a hurry to say the U.S. economy is in great shape.”
The sharp drop in gold futures tugged down mining companies. Barrick Gold lost 8 percent to $22.62, Newmont Mining fell 6 percent to $36.37 and Freeport-McMoRan 3 percent to $31.92.
Materials and energy stocks fell the most of the 10 industry groups in the S&P 500, 1.5 percent and 1.3 percent, respectively.
The Nasdaq composite dropped 5.21 points to 3,289, a fall of 0.2 percent.