Wall St closes worst week since Nov ‘08 with wild day

NEW YORK, (Reuters) – U.S. stocks closed out their  worst week in more than two years yesterday in a volatile  session that saw the major indexes whip back and forth before  the S&P 500 ended down less than a point.

More than 15.9 billion shares — or more than twice the  daily average volume — traded in the busiest day in more than  a year as investors plowed into cash-rich mega-cap stocks that  had been beaten down in recent days as the market dropped.

The market’s swings yesterday were fast and furious, with  the Dow Jones industrial average covering 416.41 points from  its session high to its intraday low.

The intense selling this week reflects frustration with  sluggish economic growth and politicians’ inability to address  pressing concerns over high public debt in Europe and the  United States.

Options volume hit a record, a sign investors were  protecting their portfolios from further declines. The CBOE  Volatility Index or VIX, Wall Street’s so-called fear gauge,  rose as high as 39.25 earlier, its highest level since May  2010, but ended at 32, up 1.1 percent.     “Still, the volatility index is up almost 90 percent  during the past two weeks, as fears about the European debt  crisis, the global economy and earnings have taken a heavy  toll on investor sentiment,” said Joe Cusick, senior market  analyst at online brokerage optionsXpress in Chicago.

The S&P 500 is now down 12 percent from its April 29  closing high.

Markets have been looking to European officials for  guidance as to how the region’s debt crisis will be managed.  Part of the loss of confidence stemmed from what investors  called an inadequate response to the growing threat to large  euro-zone economies Spain and Italy and banks’ exposure to  their troubled debt.

In the United States, non-farm payrolls data showed a gain  of 117,000 jobs in July compared with a forecast for an  increase of 85,000, while the country’s unemployment rate  dipped to 9.1 percent last month from 9.2 percent in June, the  Labor Department reported.

The Dow Jones industrial average rose 60.93 points, or  0.54 percent, to end at 11,444.61. But the Standard & Poor’s  500 Index edged down just 0.69 of a point, or 0.06 percent, to  finish at 1,199.38. The Nasdaq Composite Index slipped 23.98  points, or 0.94 percent, to close at 2,532.41.