Stock markets in the United States saw their biggest weekly fall for the week ending October 12 as disappointment set in after the International Monetary Fund reduced its global growth forecasts.
There was a widespread sell-off in stocks after the Washington-based IMF reduced its global growth estimate for 2012 to 3.3 percent from 3.5 percent, the slowest since the 2009 recession.
The International lender warned of even slower expansion unless the United States and the European Union worked quickly to get their economies in order and addressed threats.
A day prior to Friday economic reports showed confidence among U.S. consumers unexpectedly jumped in October to the highest level since before the recession began five years ago and jobless claims fell to the lowest since 2008.
However the prospect of a sowing economic growth was reason enough for gloom in the market.
The S&P 500(INDEXSP:.INX) tumbled 2.2 percent to 1,428.59 for the week. The Dow Jones Industrial Average(INDEXDJX:.DJI) fell 281.30 points, or 2.1 percent, to 13,328.85. Both benchmark indices had their biggest weekly retreat since June 1. NASDAQ Composite (INDEXNASDAQ:.IXIC) lost about 3%.
Analysts said that they were gripped by a period of uncertainty.
Within the S&P 500, all 10 industry groups fell at the end of the week.
Tech stocks slumped 2.9 percent as Advanced Micro Devices, Inc.(NYSE:AMD) cut its sales forecast and Apple continued its losing streak, its longest so far since July.
Dollar Tree, Inc.(NASDAQ:DLTR) led consumer- discretionary shares to a 5 percent drop after saying revenue will be at the low end of its estimate.
Aluminium maker Alcoa Inc.(NYSE:AA) slid 4.4 percent after trimming its global aluminium outlook while Wells Fargo & Co sank 4.4 percent amid narrower profit margins.
The markets have started off the earnings season amidst pessimism as the S&P 500 constituents are expected to report an over 2 percent decline in earnings in the September quarter.