Any hopes that U.S. stocks would be able to shake off a lengthy losing streak were shredded on Friday, when ongoing concerns about Europe's sovereign-debt crisis and a disappointing stock market debut for Facebook Inc. sent stocks lower.
The Dow Jones industrial average closed at 12,369.38, down 73.11 points, or 0.6 per cent. The broader S&P 500 closed at 1,295.22, down 9.64 points, or 0.7 per cent. In Canada, the S&P/TSX composite index closed at 11,280.64, down 50.04 points, or 0.4 per cent.
For the S&P 500, the decline marked the sixth consecutive down day for the benchmark index. The Dow has fallen for 12 of the past 13 sessions – which, according to Dow Jones, is the worst 13-session performance for the blue-chip index since October, 1974.
The focus of the day was on Facebook, after it concluded its initial public offering and the shares began trading on Friday in anticipation of big gains. Even skeptics of the stock – who liked to point out its sky-high valuation and the fact that insiders were more than happy to sell their holdings – expected an early pop, driven by widespread interest in the social media company.
However, the shares closed at $38.23 (U.S.), up less than 1 per cent above its IPO price of $38. Earlier in the day, there had been expectations that the shares could jump as high as $70. At least volume was strong: more than 567 million shares traded hands, making it a record for an IPO.
If investors were concerned about Facebook's valuation and its ability to grow earnings at a rapid clip, the economic overhang isn't terribly supportive either. The political vacuum in Greece has been weighing on stocks for the past couple of weeks. And with leaders from the Group of Eight nations meeting this weekend to discuss Europe's debt crisis, there seems to be little enthusiasm for risk-taking ahead of any pronouncements from leaders.
JPMorgan Chase & Co. fell 1.3 per cent after the Wall Street Journal reported that its trading loss of $2-billion might in fact be considerably larger – like, approaching $5-billion.
Canada's benchmark index surrendered 155 points from its earlier high, after the price of crude oil handed back earlier gains. Oil fell to $91.48 a barrel, down $1.08. Among energy producers, Suncor Energy Inc. fell 0.5 per cent.
Gold rose to $1,591.90 an ounce, up $17.10. However, Barrick Gold Corp. didn't follow: It fell 0.8 per cent.
David Berman