Updated from 11:18 a.m. EDT
U.S. stocks softened Friday, as traders contemplated the previous day's selloff, record-high oil prices and weakening consumer sentiment.
Dow Jones Industrial Average
was recently down 53 points at 11,401, and the
was off a point to 1272. The
was losing 11 points at 2310.
The U.S. indices were rocked Thursday, in no small part because of a Goldman Sachs downgrade of the domestic investment banks and the firm's negative comments on
. Goldman's comments combined with weakness in
Research In Motion
worked to create conditions for a steep selloff.
The Dow plunged 358.41 points, or 3%, and ended at 11,453.42, its lowest level in more than a year. The S&P fell 38.82 points, or 2.9%, to 1283.15, and the Nasdaq slumped 79.89 points, or 3.3%, to 2321.37.
"The markets are puking because the
can't be called to help them out. The Federal Reserve is powerless. They have the kryptonite of soaring inflation and the credit crisis," said Richard Yamarone chief economist Argus Research.
Ahead of the new day, Lehman Brothers said
could be facing another $5 billion in writedowns because of its exposure to the bond insurers.
Meanwhile, insurance firm
is bracing for as much as $5 billion in losses related to subprime mortgages,
Among earnings, homebuilder
posted a widened second-quarter loss that was worse than Wall Street's expectations.
Following the prior close,
Bank of America
announced it would
7,500 jobs after merging with mortgage lender
also announced it would trim as many as 1,290 jobs as a profit-boosting measure. Anheuser had on Thursday rejected an unsolicited bid of $46 billion from InBev.
In tech, telephone company
led the decline, falling 6% on an announcement that Sony Ericsson, its joint venture with
, has seen decreased demand for its mobile phones.
Credit Suisse also downgraded
to neutral from outperform, predicting the company would have trouble keeping up in the smartphone space.
RIM shares continued Thursday's selloff, losing 4%, and
was dropping 8%.
Management consulting and information technology services provider
was one of few tech stocks trading in the green. After Thursday's close, the company
that beat expectations.
Materials and energy stocks were on the rise.
enjoyed modest gains.
Traders were also monitoring the latest surge in oil, whose run-up this year was given new fuel in the previous session by comments from OPEC's president that $170-a-barrel crude could be a reality this year.
Lately, oil was up $1.10 at $140.74 a barrel. It had previously reached a heretofore unseen price of $141.67. The
ETF was adding 0.7% to $113.92. Gold was up $13 at $928.10.
In economic data, the University of Michigan's June consumer sentiment index dropped to 56.4 from 59.8 in May, reaching its lowest levels in 28 years. The Commerce Department's personal spending number climbed 0.8% from April to May, its biggest increase since November 2007. Personal income rose 1.9% for the month, beating analyst predictions of 0.7%.
"Things are not that good, that we can spend at that pace, but things are not that bad as indicated in the consumer confidence. That's a real exaggeration of what's going on out there," said Yamarone. He said that the spending can be explained by the government's stimulus package.
Treasury prices were rising. The 10-year note was up 8/32 in price to yield 4%, and the 30-year was up 19/32, yielding 4.57%. The dollar was gaining against the euro, but losing ground to the yen and the British pound.
European markets were mixed, while Asia's exchanges slid. London's FTSE was up 0.2%, and Frankfurt's DAX was down 0.6%. Japan's Nikkei and Hong Kong's Hang Seng were both weaker.