Stocks ended the day lower on Friday, with markets rattled by early disappointments over quarterly earnings from JPMorgan Chase & Co. and looming European credit-rating cuts by Standard & Poor’s.
The Dow Jones industrial average closed at 12,422.06, down 48.96 points or 0.4 per cent – a decent improvement after being down more than 150 points earlier in the day. The broader S&P 500 closed at 1289.09, down 6.41 points or 0.5 per cent. In Canada, the S&P/TSX composite index closed at 12,231.06, down 43.26 points or 0.4 per cent.
The S&P credit-rating cuts were well-telegraphed, with European officials essentially confirming the news to various media outlets ahead of official confirmation of the moves, expected on Friday evening. France is expected to lose its triple-A rating, along with Austria.
Meanwhile, news in Greece also hung over the market. There, a breakdown in negotiations with private debt-holders threatens to force the country into default.
The bad news outweighed an upbeat reading on U.S. confidence: The University of Michigan consumer sentiment index rose to 74, up from 69.9 and above expectations.
U.S. financials were the hardest hit stocks on the Dow, with JPMorgan falling 2.5 per cent after the bank kicked off quarterly reporting within the sector with disappointing results: Its earnings fell 23 per cent and revenue fell 17 per cent. Bank of America Corp., which reports its results next week, fell 2.7 per cent.
In other moves, Intel Corp. fell 2.4 per cent and Hewlett-Packard Co. fell 1.7 per cent.
Investors moved into the typical havens during the day, driving down yields on U.S. government bonds. The yield on the five-year Treasury bond hit a record low of 0.77 per cent at its low point, before recovering slightly. However, gold offered little refuge: It fell to $1,630.80 an ounce, down $16.90.
Canadian energy stocks were mixed after the price of crude oil fell to $98.70 (U.S.) a barrel, down 40 cents. Talisman Energy Inc. fell 3.4 per cent and Suncor Energy Inc. fell 0.1 per cent, but Canadian Oil Sands Trust rose 1.1 per cent. In other moves, Barrick Gold Corp. fell 0.4 per cent and Research In Motion Ltd. fell 1.4 per cent.