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Unlike Facebook (NASDAQ:FB), “sell in May and go away” lived up to the hype. On Thursday, equities closed the month on a low note. The Dow Jones Industrial Average (NYSEARCA:DIA), S&P 500 (NYSEARCA:SPY) and Nasdaq (NASDAQ:QQQ) all added to their losses for May. For the month, the Dow and S&P 500 fell more than 6 percent, while the Nasdaq dropped 7.2 percent. In fact, The Dow and Nasdaq suffered their worst monthly decline since May 2010, when the infamous Flash Crash rattled investors.
May has been a difficult month for the market in recent years. In May 2010, the Dow plunged 7.9 percent. Last year, the blue-chip index fell almost 2 percent. This year’s sell-off was ignited by the deepening eurozone insolvency crisis, as massive debt loads and rising interest rates in Greece and Spain worried investors. Confidence in the financial system was eroded further as JPMorgan, America’s largest bank by assets, reported a surprise $2 billion trading loss. Not even the most highly anticipated initial public offering in years could renew interest in equities. After going public on May 18 at a price of $38, shares of Facebook logged a 22 percent decline for the month.
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The Dow only logged 5 positive trading days in May, as investors continued to pull their money out of stocks. U.S. equity mutual funds witnessed outflows of $7.2 billion in the week ended May 23, according to the latest data from the Investment Company Institute. It was the second biggest weekly outflow of the year and marked the 14th consecutive week that investors withdrew money from U.S. equity funds.
To conclude the dismal month of May, the Commerce Department announced that the nation’s gross domestic product increased at a 1.9 percent annual rate in the first-quarter. This was a downward revision from when the agency reported a 2.2 percent annual rate in April. In comparison, the GDP rate was 3 percent in the fourth-quarter. A separate report by the Labor Department also showed that initial jobless claims increased by 10,000 to a seasonally adjusted 383,000 for the week ended May 26. It was the biggest jump in over a month and above expectations of about 370,000 claims.
“It’s just an awful close to an awful month,” said Mark Lehmann, president of JMP Securities, according to the WSJ. “You just got more of the same, unfortunately, which is softer data, soft markets, commodities weaker.”
Listed below are the best and worst performers in the Dow for May:
Wal-Mart Stores Inc. (NYSE:WMT): +11.73%
Walt Disney Co. (NYSE:DIS): +6.03%
AT&T Inc. (NYSE:T): +3.83%
Verizon Communications Inc. (NYSE:VZ): +3.12%
JPMorgan Chase and Co. (NYSE:JPM): -22.87%
Caterpillar Inc. (NYSE:CAT): -14.74%
Alcoa Inc. (NYSE:AA): -12.3%
DuPont (NYSE:DD): -9.73%
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