U.S. stocks fell in early trade Friday following Thursday's huge-volume market massacre. Investors' lack of confidence in the European Central Bank's (ECB) ability to stem debt crises in Italy and Spain contributed to a global equities decline. Growing fear about a worldwide economic slowdown also stoked the selling.
There's renewed speculation about further quantitative easing from the Federal Reserve as market and economic confidence ebbs. Another news item grabbing Wall Street's attention Friday is the Labor Department's nonfarm payrolls report for July. Economists expect a gain of 85,000 new jobs, not enough to move the needle on the unemployment rate. The data are due out at 8:30 a.m. EDT.
European stocks were continuing to fall Friday before Wall Street's open on concerns that Italian and Spanish bailouts would be necessary. The German, French and Spanish prime ministers will have a phone conference today to discuss the eurozone debt crisis.
Asian stocks also got pummeled Friday. Major indices posted steep declines on the heels of Wall Street's carnage. Following Tokyo's huge round of yen-selling, Japan's currency was trading lower against the dollar before Wall Street's open.
Treasuries and Commodities
Stateside, Treasuries rallied as investors sought safety. Yields have been dropping on the price upturn. The 30-year yield fell to 3.72% from its previous level of 3.87%. Gold continued its rally in the face of more selling in equities. Although some analysts believe a correction in precious metals could be on the horizon after huge run-ups recently, gold advanced $10 in early trade, to $1,669 per ounce. Crude oil, which has fallen from the headlines as its price has declined and as other market news has taken precedence, fell $0.23 to $86.40 ahead of the open.
Corporate earnings have fallen off the radar in the face of worldwide economic concerns, but there are a few reports due out today. DJIA component Procter & Gamble (PG) reported fourth-quarter net income of $0.84 per share on revenue of $20.9 billion. Analysts had been eyeing net income of $0.82 per share on revenue of $20.63 billion. The company's first-quarter forecast fell below analysts' estimates. It said it was continuing to enhance product development and packaging to manage rising input costs. It would also raise prices in response to cost increases. P&G shares fell $0.18 following the news, a decline of 0.3% to $59.40.
Other price movers Friday included LinkedIn (LNKD), which advanced $3.48, 3.64%, to $99. Late Thursday, the company reported better-than-expected second-quarter results. Analysts had expected a quarterly loss, but the company surprised with a profit of $0.04 per share. LinkedIn said it would continue to invest in technology and new product development, even at the expense of quarterly earnings ahead.
Growth leader Priceline (PCLN), whose shares sliced their 50-day line in heavy volume Thursday, also delivered a strong report after Thursday's closing bell. Shares traveled $43.66 higher, or 9.03%, to $527 in premarket trade. If the move holds, it would bring the stock solidly back above its 50-day moving average.
Fertilizer maker CF Industries is another stock rebounding after plunging below its 50-day line Thursday. It, too, reported second-quarter results that beat analysts' expectations. Sales reached record highs, increasing at a rate of 38% from the year-ago quarter. CF shares bolted $6.41 early Friday, up 4.53%, to $148.
As usual, analyst actions affected early trade in some stocks. Cloud-based business software maker Salesforce.com (CRM) jumped $0.57, 0.42%, to $136. The upside action followed an upgrade to Outperform from Market Perform at Wells Fargo. Shares have closed lower over the past four weeks, and closed Thursday below their 40-week moving average.
VMware (VMW), which makes virtualization software that allows corporate users to run multiple operating systems on one workstation, also got promoted at Wells Fargo. The stock still declined ahead of the open, however, shedding $0.22, 0.25%, to $88.66. Until this week, the stock's technicals had indicated healthy support. However, going into Friday, it was down 11% for the week, nestled just at its 200-day line.