Dow Heads Deeper Into Negative Territory

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After a brief respite, the markets headed deep into negative territory as traders were cautious to take bets ahead of the weekend with the European situation still unresolved. 

Today's Markets

As of 3:25 p.m. ET, the Dow Jones Industrial Average fell 106 points, or 0.88%, to 11,938, the S&P 500 dipped 11.6 points, or 0.92%, to 1,250 and the Nasdaq Composite dropped 17.2 points, or 0.64%, to 2,681.

Headlines from Europe, where policymakers are struggling to stem the deepening sovereign debt crisis before it continues spreading to larger economies, have ruled the day in the past several sessions.  Indeed, the Dow plunged nearly 600 points in the first two sessions only to soar close to 400 points in the next two.  

The Group of 20 industrial and developing countries is finishing up its summit Friday in which world leaders have been grappling with fears that Europe's debt crisis could put the entire global economy in peril.  Traders' anxiety was heightened when German Chancellor Angela Merkel said hardly any G-20 countries have agreed to participate in the region's bailout fund. Echoing those comments, U.K. Prime Minister David Cameron said the country won't fund the euro zone's bailout directly or through the International Monetary Fund. 

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The group that represents many of the world's most influential economic players also failed to strike an agreement on how to set up the IMF to respond to the debt crisis, which some market participants saw as yet another setback. 

The G-20's response to Europe's debt crisis "sorely lacks detail," according to Karen Ward, HSBC's global senior economist, adding that little has changed since European leaders forged a general plan to stem the crisis late last week. 

Additionally, Greece's beleaguered Prime Minister George Papandreou faces a confidence vote on Friday after his plans to hold a national referendum on the country's much needed bailout ignited fury across the globe, and quashed credibility in his government.

The U.S. economy -- the world's biggest -- has also come into focus this week along with a slew of headlines from Europe.  The economy added 80,000 jobs last month, pushing the unemployment rate down to 9%, according to a closely-watched report from the Labor Department.  Economists had expected the economy to add 95,000 jobs,while the unemployment rate held steady at 9.1%. The private sector added 104,000 jobs, while the government shed 24,000.  

There were also significant upward revisions to September's report. Indeed, according to a calculation by economists at BTIG, a global trading firm, the increase for prior months effectively pushes October's increase to 102,000, which is well above the consensus forecast. 

The Federal Reserve has kept short term interest rates at historical lows, and crafted unconventional easing programs, in a bid to jumpstart hiring, but the labor market has remained weak since the financial crisis in 2008.  Indeed, the jobless rate is only 10.1 percentage points lower than its recent 2009 peak, and well higher than levels that are considered to be the so-called "natural" level of unemployment.

On the corporate front, Groupon (GRPN) made its debut on the Nasdaq Stock Market on Friday.  The local deals company saw its shares zoom as much as 50% higher. 

The euro fell 0.17% to $1.378, while European blue chips dropped 2.5%.  Yields on U.S. government debt fell as traders left equity markets.  The 10-year Treasury note yields 2.052% from 2.079%. 

Energy markets were higher in choppy trade.  The benchmark American crude oil contract rose 19 cents, or 0.2%, to $94.26 a barrel.  Wholesale RBOB gasoline gained 2 cents, or 0.82%, to $2.66 a gallon. 

Gold fell $9.00, or 0.51%, to $1,756. 

Foreign Markets

European blue chips dropped 2.5%, the English FTSE 100 fell 0.49% to 5,518 and the German DAX slid 2.8% to 5,964. 

In Asia, the Japanese Nikkei 225 rallied 1.9% to 8,801 and the Chinese Hang Seng soared 3.1% to 19,843. 

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