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.
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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.