North American stocks slumped on Friday morning, with central banks in Europe and the United States showing few signs that they are gearing up for another round of economic stimulus despite ominous signs of deteriorating conditions.
The Dow Jones industrial average fell 45 points or 0.4 per cent, to 12,416. The broader S&P 500 fell 5 points or 0.4 per cent, to 1310. In Canada, the S&P/TSX composite index fell 98 points or 0.8 per cent, to 11,494.
Stocks had been showing encouraging gains earlier in the week, when investors bet that the Federal Reserve was preparing to usher in another round of quantitative easing, which involves printing money to buy government bonds. Yet, testimony from Fed chairman Ben Bernanke on Thursday put those hopes on the back-burner.
At the same time, economic news remains far from encouraging. In the latest, Germany's exports slumped 1.7 per cent in April, a far bigger dip than economists had been expecting. Meanwhile, Spain is expected to seek financial help from the euro zone this weekend in dealing with its ailing banking sector.
Among some of the key moves in the U.S. market, McDonald's Corp. fell 2.6 per cent, Bank of America Corp. fell 1.5 per cent and Alcoa Inc. fell 1.5 per cent. Some of the more defensive names did considerably better though: Wal-Mart Stores Inc. rose 1 per cent and AT&T Inc. rose 0.8 per cent.
In Canada, energy stocks were among the biggest laggards after the price of crude oil fell to $82.45 (U.S.) a barrel, down $2.37. Suncor Energy Inc. and Canadian Natural Resources Ltd. fell 2.3 per cent each. Among other commodity producers, Potash Corp. of Saskatchewan fell 2.2 per cent but Barrick Gold Corp. pulled out of a deep selloff in previous sessions, rising 0.4 per cent.Report Typo/Error