U.S. stocks edge lower on Europe worries

By Joshua Freed

Associated Press

Published: Friday, May 18 2012 12:05 p.m. MDT

It's going to take more than Facebook's initial public offering to push the stock market higher.

U.S. stock indexes were flat-to-down slightly in early afternoon trading Friday. Facebook made its Wall Street debut, fashionably late, after a computer glitch. Facebook shares were supposed to start trading at 11 a.m. Eastern, but started about half an hour late. Nasdaq said it had trouble delivering trade execution data related to the IPO.

The glitch sent shares of Nasdaq OMX Group Inc., parent company of the Nasdaq market, down 2.9 percent.

The Dow Jones industrial average has been on a prolonged slump over the past two weeks as traders saw an escalating risk that Greece could leave the euro. It has fallen 11 out of the past 12 days and is down 6 percent in May. The Dow hasn't had a losing month since September.

On Friday, the Dow was down 13 points at 12,429. The Standard & Poor's 500 index fell 0.74 points to 1,308. The Nasdaq fell nine points to 2,804.

Hewlett-Packard Co. was the biggest decliner on the Dow, falling 2 percent on news that it was considering major layoffs.

News out of Europe did little to encourage investors.

After an election in Greece that brought in political parties opposed to bailouts for the beleaguered country, the Fitch ratings agency dropped the nation to the lowest possible grade for a country not in default Thursday. Fitch said that if elections next month do not reverse the political trends in Greece, that the country's departure from the euro "would be probable."

Also, ratings agency Moody's downgraded 16 Spanish banks late Thursday, three days after downgrading Italy's, noting they are vulnerable to huge losses on government debt.

Representatives of the G-8 are meeting this weekend at Camp David, looking for assurances that leaders in Europe can contain damage if Greece leaves the euro.

European shares edged lower, following several days of big losses. Britain's FTSE 100 fell 0.1 percent, Germany's DAX lost 0.6 percent and France's CAC-40 fell 0.1 percent.

In the U.S., shares of Salesforce.com jumped 10.6 percent after the maker of web-based business software reported better-than-expected earnings and raised its guidance for the year. Gap fell 0.9 percent after dropping 3 percent earlier in the day, even though it issued higher guidance for the year.

Shares of Yahoo Inc. rose 5.3 percent after Dow Jones' tech website AllThingsD.com reported that the web portal is close to a deal to sell a large part of its stake in China's Alibaba Group. Many investors view the Alibaba stake as Yahoo's most valuable asset.

Foot Locker Inc. rose 10 percent after its quarterly profit jumped 36 percent, sprinting past Wall Street predictions and setting a company record for quarterly earnings.

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