FROM MORRISON SECURITIES PTY. LTD:
U.S. STOCK MARKETS:
Stocks fell ahead of the long holiday weekend as reports of weakness in Spain underlined anxiety about the euro zone, outweighing a better-than-expected reading on U.S. consumer confidence.
A weaker euro and weaker equity markets had weighed on the base metal complex. Oil futures rose more than 1% Friday, as escalating hostilities between Israel and Palestinian militants renewed fears about a broader conflict that would disrupt supplies of Mideast crude oil.
The Dow Jones Industrial Average fell 74.92 points, or 0.6%, to 12454.83. Caterpillar fell 1.6% while International Business Machines dropped 0.9%, weighing on the price-weighted average. Nevertheless, the blue-chip benchmark capped its first weekly increase this month, mostly due to a rally on upbeat European headlines Monday.
The Standard & Poor's 500-stock index fell 2.86 points, or 0.2%, to 1317.82. Industrial and materials companies lagged behind. The Nasdaq Composite fell 1.85 points, or 0.1%, to 2837.53.
Also Friday, Standard & Poor's cut its ratings on the credit-worthiness of five banks and revised its assessment of Spain's economic risk, saying it believes the country is entering a double-dip recession that will lead to a large increase in troubled assets.
Meanwhile, the Reuters/University of Michigan consumer-sentiment index indicated that domestic consumers are more upbeat about the economy than they have been since late 2007.
The latest reading topped economists' forecasts. Facebook dropped 3.4% to $31.91, remaining well below the company's $38 initial-public-offering price. Verifone Systems slid 15% after the electronic-payment company reported fiscal second-quarter results that topped estimates, but provided a third-quarter outlook that was below earnings and revenue projections.
EUROPEAN STOCK MARKETS
Drug makers helped European stock markets close in positive territory Friday, after a session where uncertainty about growth in Europe and China made for choppy price action.
The Stoxx Europe 600 index closed 0.2% higher at 242.49, after trading as low as 240.66 earlier in the session. After a rocky start, the index gained 1.5% for the week.
Drug makers were among top gainers. Novo Nordisk AS added 1.8% as European regulators adopted a positive opinion on the firm's treatment for a rare bleeding disorder. Novartis AG rose 0.9%, while GlaxoSmithKline PLC added 0.5%.
The pan-European index traded in negative territory for most of the afternoon, but trimmed losses after a final reading of the University of Michigan-Thomson Reuters consumer sentiment index for May surprisingly came in at the highest level since October 2007.
Meanwhile, Germany's forward-looking consumer climate index held steady at 5.7 points for June, German market research group GfK said.
The German DAX 30 index gained 0.4% to 6,339.94. Industrial conglomerate Siemens AG rose 2.3%. The company said its lighting unit Osram AG will build a new chip assembly plant in China. E.ON AG rose 1.5% after analysts at HSBC lifted it to neutral from underweight.
Fellow utility RWE AG rose 1.6%. Utilities were also higher in the U.K. United Utilities Group PLC rose 1.9% after Nomura analysts raised their target price on it.
The FTSE 100 index closed slightly higher at 5,351.53, with miners under pressure after reports of slowing Chinese bank lending. Vedanta Resources PLC fell 3.3%, Xstrata PLC lost 2.4%, and heavyweight BHP Billiton PLC slipped 0.9%.
Bucking the trend, temporary power provider Aggreko PLC gained 2.4% after analysts at HSBC lifted shares to overweight from neutral. In France, oil group Total SA rose 0.5% as oil prices inched higher. That gain helped lift the CAC 40 index 0.3% to 3,047.94.
The Spanish IBEX 35 index posted a small gain, up 0.1% to 6,543.00. Shares of troubled lender Bankia SA were suspended in Madrid at the company's request ahead of a board meeting. Banco Popular Espanol SA gave up 2.2% and Bankinter SA lost 0.8%.
The head of Spain's Catalonia region said the country's regions are having difficulties financing themselves, which fueled worries of an expanding Euro-zone crisis. Spanish officials offered reassurances later, however, saying Catalonia will honor all of its financial commitments.
Adding to investor jitters, shares of Spain's Bankia were suspended for trading ahead of a board meeting to approve a recapitalization plan. The bank later said Madrid is prepared to inject up to $24 billion into the lender in what would be the largest bank bailout in Spain's history.
Greek stocks trailed the rest of Europe with the Athens General Index down 3.5% at 485.18.
ASIA-PACIFIC STOCK MARKETS
Asian markets ended mixed Friday as comments by the Italian prime minister Thursday failed to sooth investor concerns about Europe.There were also developments in Greece, where new polls showed the anti-bailout leftist party have a four-point lead over the conservative party ahead of elections next month.
The China Shanghai SE Composite fell 0.7% to 2333.55. Hong Kong's Hang Seng Index spent most of the day lower, but closed 0.3% higher at 18713.41 after getting a boost from a strong opening in Europe.
Japan's Nikkei also finished higher, up 0.2% to 8580.39, and Korea's Kospi climbed 0.5% to 1824.17. Japan Tobacco rose 5.2% after the company Thursday announced the acquisition of Belgian loose leaf tobacco maker Gryson for EUR475 million.
Fast Retailing rose 2.4% on defensive buying, while fellow retailer Seven & i Holdings added 2.4% to Y2,384. Hong Kong-listed Chinese oil company Cnooc climbed 1.3%, breaking three days of losses, on news that it made a new oil discovery in south Liaodong Bay in northeast China.
Property developers Hang Lung Properties and Henderson Land outperformed the Hong Kong market after better-than-expected land auction results Thursday, climbing 2.2% and 1.6% respectively.
China shares fell to the lowest level in six weeks as a weak domestic economic outlook continued to weigh on sentiment. Among the decliners, banks slipped on concerns that large lenders may miss loan targets for the year due to weak corporate borrowing appetite.
China Construction Bank was down 0.2% while Industrial & Commercial Bank of China lost 0.2%. Property stocks were mixed after a government think tank said property transaction volumes and prices could continue to dip this year. China Vanke finished down 0.8% and Tianjin Reality Development lost 1.5%. Poly Real Estate gained 0.5%.
Base metals closed mixed on the London Metal Exchange Friday following a largely range-bound session that saw prices drift in sideways trade ahead of the weekend.
At the close, LME three-month copper was 0.4% higher on the day at $7,638 a metric ton. Zinc gained the most, closing 1.2% higher at $1,908.50/ton.
Oil futures eked out a gain Friday, as traders remained wary of staking out large positions following inconclusive talks with Iran and a long weekend in the U.S.
Light, sweet crude for July delivery settled 20 cents, or 0.2%, higher at $90.86 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled 28 cents higher, or up 0.3%, at $106.83 a barrel.
Gold futures edged higher as some traders were reluctant to go into the weekend holding bets prices would fall on the chance there would be a new development in Europe's debt crisis.
The most actively traded gold contract, for June delivery, rose $11.40, or 0.7%, to settle at $1,568.90 a troy ounce on the Comex division of the New York Mercantile Exchange. Friday's gain wasn't enough to erase this week's losses, and futures fell 1.4% during the week.
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