An investor checks stock information in front of an electronic board as his figure is reflected in a marble counter at a brokerage house in Wuhan, Hubei province, August 23, 2011.STRINGER/CHINA/Reuters
It seems that investors have been distracted by shockingly low U.S. economic growth in the second quarter, driving down stocks on Friday morning even as Ben Bernanke gets set to deliver a speech in which he may discuss ways to revive the recovery.
The Dow Jones industrial average fell 98 points or 0.9 per cent, to 11,052. The broader S&P 500 fell 7 points or 0.6 per cent, to 1152. In Canada, the S&P/TSX composite index fell 70 points or 0.6 per cent, to 12,214.
Before trading began, the Commerce Department reported that U.S. gross domestic product grew by just 1 per cent at an annualized rate in the second quarter, down from a previous estimate of 1.3 per cent – which was itself a real shocker when it was released.
Bank of America Corp. fell 1.4 per cent, just a day after surging when Warren Buffett announced a $5-billion (U.S.) investment in the financial giant. Johnson & Johnson fell 1.8 per cent, while Chevron Corp. and Caterpillar Inc. fell 1.5 per cent each.
However, Tiffany & Co. jumped 6.5 per cent after the jewellery retailer reported strong second quarter earnings.
In Canada, trading in Sino-Forest Corp. was halted after the Ontario Securities Commission dropped a bombshell: It ordered the company's executives to resign believe over concerns that it "misrepresented some of its revenue and/or exaggerated some of its timber holdings." The OSC also said that some of the officers and directors – including its chief executive – appear to be engaging in acts "they know or reasonably ought to know perpetuate a fraud."
Meanwhile, Royal Bank of Canada slumped 4.7 per cent after it reported its fiscal third quarter results.
David Berman