Stocks to Watch

Dow -90.52 at 11192.58, Nasdaq -37.31 at 2518.21, S&P -14.33 at 1199.21

[] Friday brought stocks their worst loss in three weeks. That locked in place the stock market’s worst weekly performance since August.

Stocks started the session in the red in response to speculation that China might raise interest rates in an effort to fend off inflation. The fear that higher rates could temper growth prompted a 5.2% drop in the Shanghai Composite. Ongoing concerns about eurozone sovereign debt was also a part of the early backdrop, though there was chatter that aid may be in store for Ireland.

All early efforts by stocks to trim losses were cut short. That fueled selling, such that the broader market fell through preliminary support levels. Stocks struggled to work their way up from session lows. That left the S&P 500 to settle below the 1200 line with a 1.2% loss for the day and a 2.2% loss for the week.

With participants inclined to exit positions the dollar’s first decline in six sessions was generally disregarded. The dollar attempted to pare its loss, but settled 0.2% lower for the day.

The preliminary Consumer Sentiment Survey for November from the University of Michigan was also shrugged off. It came in at 69.3, which is slightly above the 69.0 that had been expected among economists polled by and up from the 67.7 that was recorded in October.

While each of the 10 major sectors finished lower, materials stocks were hit the hardest. The sector outperformed in the prior session, but was dropped for a 2.2% loss this time around.

Weakness among basic materials plays was exacerbated by heavy selling among commodities. Collective weakness among commodities dropped the CRB Commodity Index for a 3.6% loss. That marked its worst single-session slide in more than a year. The dramatic pullback marks the third straight loss for the CRB after it set a two-year high earlier this week.

Some 90% of the S&P 500 settled in the red, but NVIDIA (NVDA 13.26, +0.65) was one of the few advancers, thanks to a better-than-expected earnings report. Intel (INTC 21.53, +0.32) also staged a gain after it announced a 15% hike to its quarterly dividend. Even Disney (DIS 37.75, +1.82) escaped the selloff with a rebound that actually followed an earnings late in the prior session. That bounce took shares of DIS to their best level in a decade.

Treasuries moved in mixed fashion as the 10-year Note fell more than a point and the 30-year Bond dropped almost a full point. Their yields were quoted at 2.79% and 4.28%, respectively, at the close. Treasuries showed no real movement to the Fed’s open market operations to purchase $7.2 billion worth of Notes with maturities from 2014 to 2016.

Advancing Sectors: (None)Declining Sectors: Materials (-2.2%), Financials (-1.5%), Tech (-1.4%), Energy (-1.4%), Industrials (-1.1%), Health Care (-1.1%), Consumer Discretionary (-1.0%), Telecom (-0.9%), Utilities (-0.8%), Consumer Staples (-0.3%)

..Nasdaq 100 -1.6%. ..S&P Midcap 400 -1.5%. ..Russell 2000 -1.7%.

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