Stocks Log Worst Week in 2012; FB Closes Flat
Stocks closed near session lows Friday, with all three major averages posting their worst weekly drop this year, as investors were cautious ahead of the weekend amid fears over the euro zone and euphoria over Facebook's trading debut fizzled.
Facebook eked out a tiny gain after fighting to stay in positive territory in the final hour of trading. The stock surged more than 10 percent out of the gate after pricing at $38 a share, becoming the largest Internet IPOin history. (Read More: Was the Facebook Deal Overhyped?)
Over 578 million Facebook shares exchanged hands during the regular trading session, easily surpassing GM's first-day record trading volume of 458 million shares by 3pm ET. Facebook's trading action accounted for almost 22 percent of the Nasdaq's volume today.
The Dow Jones Industrial Average fell 73.11 points, or 0.59 percent, to close at 12,369.38, logging its 12th down day in the last 13 sessions for the first time since October 1974.
The S&P 500 dropped 9.64 points, or 0.74 percent, to end at 1,295.22, slumping below the key 1,300 level for the first time since mid-January. The Nasdaq erased 34.90 points, or 1.24 percent, to finish at 2,779.79.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, closed above 25.
For the week, the Dow tumbled 3.52 percent, the S&P 500 declined 4.30 percent, and the Nasdaq plunged 5.28 percent. JPMorgan was the biggest laggard on the Dow for the week, while Wal-Mart rallied.
All 10 S&P sectors finished in negative territory for the week, led by financials and materials.
"Facebook has a long way to go in terms of creating value," said Manual Henriquez, CEO of Hercules Technology Growth Capital. "Facebook's in a process of monetizing those mobile users, something that hasn't really happened yet in the industry, and it's a revolutionary thing they're about to do so there's a really good future there for the valuation for that company to run further."
However, shares of other social media companies including LinkedIn , Yelp , Zynga and Groupon ended sharply lower.
Meanwhile, Pivotal Research Group initiated coverage of Facebook with a "sell" rating and set a price target of $30 on the stock
Nasdaq shares were dented amid buzz among traders over possible technical issues at the exchange earlier, causing Facebook's trading to be delayed by almost 30-minutes. Nasdaq later confirmed that all systems were back to operating normally and all trading reports have been delivered.
European shares ended sharply lowerafter Moody's cut the long-term debt and deposit ratings of 16 Spanish banks, including the euro zone's largest, Banco Santander. Adding to jitters earlier in the session, Fitch slashed Greece's rating to CCC from B-minus, due to the heightened risk that the country might have to leave the euro zone.
Meanwhile, new French President Francois Hollande will meet President Obama ahead of a meeting of G8 leaders this weekendand a NATO summit that immediately follows.
Crude oil settled below $92 a barrelfor the first sime since last October amid the ongoing uncertainty in the euro zone.
Yahoo rallied after reports the Internet company may be close to reaching a deal to sell a large part of its stake in Alibababack to the Chinese Internet company as early as Monday.
JPMorgan added to recent declines, plunging almost 10 percent for the week and wiping out most of its gains for the year, after the Senate Banking Committee called CEO Jamie Dimon to testify following the firm's disclosure of its massive trading lossearlier this month.
Ann gained after the parent company of Ann Taylor posted better-than-expected earnings.
Also among earnings, Foot Locker surged after the athletic footwear store topped quarterly results, thanks to improved gross margins. And smaller rival Brown Shoe
Salesforce.com jumped after the cloud-computing company boosted its full-year outlook and topped Wall Street earnings expectations. At least five brokerages raised their price target on the company.
Meanwhile, Autodesk tumbled sharply after the design-software maker
GE said it aims to double the number of joint ventures it has in China from the current 28 in roughly five years. The minority shareholder of NBCUniversal is also working with the government of Myanmar on possible infrastructure projects.
Winnebago surged after the motor-home manufacturer confirmed that North Street Capital offered a sweetened bid for the companyat $11 a share. Shares were briefly halted at the open.
—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
On Tap Next Week:
MONDAY: Chicago Fed nat'l activity index, Atlanta Fed's Lockhart speaks; Earnings from Campbell Soup, Lowe's, Urban Outfitters
TUESDAY: Existing home sales, 2-yr note auction, Atlanta Fed's Lockhart speaks, Arkansas/Kentucky Primaries; Earnings from AutoZone, Best Buy, Medtronic, Dell, Take Two
WEDNESDAY: Weekly mortgage apps, FHFA home price index, oil inventories, 5-yr note auction, Minneapolis Fed's Kocherlakota speaks, CME shareholders mtg, Kraft shareholders mtg; Earnings from Hewlett-Packard, Big Lots, Toll Brothers, NetApp, Pandora
THURSDAY: Durable goods orders, jobless claims, 7-yr note auction, BlackRock shareholders mtg, Goldman Sachs shareholders mtg, McDonald's shareholders mtg; Earnings from Costco, Tiffany
FRIDAY: Consumer sentiment, USDA food prices outlook
More From CNBC.com: