An investor is reflected in a grim chart at the Greek Stock Exchange in Athens on May 14, 2012.Petros Giannakouris/The Associated Press
Stocks fell on Friday, overshadowing any upbeat feelings about major indexes turning in weekly gains and breaking a three-week losing streak.
The Dow Jones industrial average closed at 12,454.83, down 74.92 points or 0.6 per cent. The broader S&P 500 closed at 1317.82, down 2.86 points or 0.2 per cent. In Canada, the S&P/TSX composite index closed at 11,576.47, up 10.40 points or 0.1 per cent.
For the week, the S&P 500 rose 1.8 per cent and Canada's benchmark index ended 2.6 per cent higher – marking the indexes' first weekly gains following three consecutive stumbles.
Friday delivered with some upbeat economic news in the United States: The University of Michigan's consumer confidence index broke free of expectations and rose to 79.3 – its highest reading since October 2007 and its ninth straight increase.
Investors, though, were more focused on Europe. There, Spanish regulators suspended trading in Bankia SA, Spain's fourth-largest lender, ahead of what is expected to be a €19-billion bailout by the government as it attempts to steady the country's financial turmoil. At the same time, Standard & Poor's cut its credit ratings on five Spanish banks, including Bankia.
Some European bond yields reflected the rising anxiety in the region – especially in countries where nerves are already frayed over their ability to cut government spending. The yield on Spain's 10-year government bonds rose to 6.27 per cent, up 15 basis points (there are 100 basis points in a percentage point). The yield on Italy's 10-year government bonds rose to 5.64 per cent, up 10 basis points.
Meanwhile, investors moved into the safety of U.S. government bonds, sending yields down as prices rose. The yield on the 10-year U.S. Treasury bond fell to 1.74 per cent, down 3 basis points.
Garda World Security Corp. rose 10.3 per cent after the Canadian-based security firm reported quarterly earnings of $6.3-billion, or 20 cents a share, up 39 per cent over last year. The gains brought some relief to shareholders who had seen the share price wither by more than 70 per cent from its high in 2006.
Facebook Inc. finished its first full week of trading on another down note, falling 3.4 per cent. The shares have fallen a total of 16 per cent from their initial public offering price of $38 (U.S.) last Friday amid a flood of complaints about the IPO process.
David Berman