Updated from 3:27 p.m. EDT
Stocks in the U.S. were buried Friday as investors dealt with a resuming climb in oil and abysmal home-sales numbers, while unwinding their positions ahead of a long holiday weekend.
Dow Jones Industrial Average
slid 146 points, or 1.2%, to 12,480, and the
gave up 18 points, or 1.3%, at 1376. The
sank 20 points, or 0.8%, to 2445.
"This week was not terrific, so I think investors are looking to take money off the table ahead of the three-day weekend," said Paul Nolte, director of investments with Hinsdale Associates. U.S. markets will be closed Monday in observance of Memorial Day.
"It's sell now and ask questions later," he said.
Earlier in the week, stocks were crushed in a huge two-day selloff as investors were jarred by new highs in oil and gloomy economic forecasts by the
. The major indices attempted a halting recovery on Thursday, but the session saw rather thin trading volume.
"We are seeing a little bit of a different dynamic in the market," said Nolte. "We're seeing more volume now on the market declines than on those advancing days, and certainly over the last four months or so, volume had been better on the advancing days."
That shift, he added, is not a good sign.
"The reality is, expectations probably got out of line in April," said Jason Pride, director of research with Haverford Investments. "And now everybody that that hopped back in, thinking everything was okay, now they're backing off a little bit. It's this manic mood that the market seems to have. We go back and forth on it in dramatic swings, when the reality is, not much has changed. It's only the perception that's different."
Specifically, Pride said it was "outrageous" that people began believing the
would actually hike interest rates soon. He predicted the economy will undergo an extended "soft" period that it will take awhile to surmount, though he also believes the likelihood of a dramatic recession is being "gradually stripped away."
Helping to drag on the market Friday were crude-oil futures, which turned higher again following yesterday's brief reprieve from a stunning upward climb over the past few weeks. Crude hit an intraday high near $134 a barrel earlier today, but later pared back its gains to $1.38 at $132.19. The national average for gas prices at the pump lifted to another record of $3.875 a gallon, according to AAA.
Gold futures added $7.50 to $925.80 an ounce. The U.S. dollar was back on a downward track, losing 0.5% against the euro to $1.5772 and fetching just 103.31 yen, a 1% tumble from the prior settlement.
On the economic front, the National Association of Realtors said April's existing-home sales fell 1% from March to a seasonally adjusted annual rate of 4.89 million units -- a hair better than the economists' consensus, though also a 17.5% slide from a year earlier. Total inventory jumped 10.5% sequentially and it should take 11.2 months, a 23-year high, to work through that backlog at the current sales pace. That's up from a 10-month estimate in March.
"With prices collapsing the incentive not to buy a home is increasing by the week, and with inventory showing no sign of improvement prices will keep falling," wrote Ian Shepherdson, chief U.S. economist with High Frequency Economics. "Supply always rises in spring so the headline inventory numbers overdo the true position, but it is still bad."
On the corporate side in the new session, striking workers at
-- the main parts supplier to automaker
-- voted to accept a new employment contract and return to work next week. The strike had lasted about three months and forced GM to idle several of its manufacturing plants.
Still, GM lost ground after the company said the strike is expected to bleed $1.8 billion out of pretax second-quarter earnings, having held back production on some 230,000 vehicles. Other work stoppages caused by finalizing local union agreements will spur a further $200 billion in pretax losses this quarter, said the company. Furthermore, GM expects "only a portion of this lost production will be recovered," considering the harsh economic environment and a market shift away from the sorts of vehicles the strike impacted.
GM shares lost 4.5%, making it the Dow's worst-performing component recently, and American Axle gave up 4.2%.
At the same time, airline stocks were pummeled after Standard & Poor's placed a number of carriers on credit watch with negative implications, citing ballooning fuel prices. The Amex Airline Index tumbled 4.2%.
, whose stock rating was also yanked down to underperform from outperform at Credit Suisse, plummeted 19.5%.
sank 9.3% after saying it will
, and American Airlines parent
, which said earlier this week that it will
and charge customers for checked bags in order to offset pain caused by fuel prices, lost 4.6%.
lost at least 4.5% apiece.
, another Dow member, has laid off at least 200 investment-banking executives over the past couple of days, according to people at the firm. The network said the move was unrelated to JPMorgan's plan to make room for incoming
employees by cutting into its own staff.
in March JPMorgan agreed to take Bear out in a highly discounted
-backed deal, as the latter firm stood on the brink of collapse.
Shares of JPMorgan were down 1.7%.
On the sparse winning side was
. Shares shot up 7.7% after the
reported that Belgium-based beer giant
is hammering out a $46 billion takeout attempt on the Budweiser brewer, citing unnamed sources. The per-share bid is expected at $65 a share, said the paper.
In earnings, information-technology firm
issued bullish full-year guidance prompted by a
30% leap in bookings
compared with last year, even as a tax charge dragged fiscal fourth-quarter results well below analyst estimates. Shares were climbing 3.9%.
Also, clothing retailer
of $249 million, or 34 cents a share, but that fell short of the Street's consensus. Sales also slipped from a year earlier to a lower-than-expected $3.38 billion. Shares shed 1.8%.
, another apparel seller, edged ahead of last quarter's bottom-line consensus as the company achieved sizable year-over-year gains in both earnings and revenue. The stock saw action on both sides of the flat line, and closed down a nickel at $32.67.
As for notable analyst actions, Merrill bumped up
price target to $215, and Goldman Sachs added the stock to its Conviction Buy List, as both brokerages cited positive expectations for the tech giant's iPhone product. Shares ratcheted up 2.3%.
Morgan Stanley upped
to overweight while cutting
to underweight. Dell shares were better by 1.4%; Sun stock declined 2.5%.
Treasury prices were rising. The 10-year note rose 18/32 in price to yield 3.84%, and the 30-year bond jumped 26/32 in price, yielding 4.57%.
Markets abroad were mostly falling. The Nikkei 225 in Tokyo added 0.2% overnight, but the Hang Seng Index in Hong Kong slid 1.3%. Among European bourses, the FTSE 100 slumped 1.5% and Germany's Xetra Dax plunged 1.8%. The Paris Cac surrendered 1.9%.