CMC Markets Weekly Report

Stocks in the U.S. closed near session lows Friday, with all three major averages posting their worst weekly drop this year. Investors were cautious ahead of the weekend amid fears over the euro zone and euphoria over Facebook's trading debut fizzled.

Stocks in the U.S. closed near session lows Friday, with all three major averages posting their worst weekly drop this year. Investors were cautious ahead of the weekend amid fears over the euro zone and euphoria over Facebook's trading debut fizzled.

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. The S&P500 dropped 9.64 points, or 0.74 percent, to end at 1,295.22 whilst the Nasdaq erased 34.90 points, or 1.24 percent, to finish at 2,779.79.

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 IPO in history with over 578 million Facebook shares exchanged.

European shares ended sharply lower after 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, President Obama pledged his support for new French President Francois Hollande’s new growth agenda at the G8 meeting over the weekend and a NATO summit that immediately follows.

Crude oil settled below $92 a barrel for the first time since last October amid the ongoing uncertainty in the euro zone. The US dollar index dropped 0.5% to 81.08 as did the Aussie dropping another 0.7% to US$0.9822 after another big Australian stock market rout on Friday. Gold on the other hand gained another US$17.20 to US$1591.40/oz.

In the week ahead, Wall Street will at least have some economic data to contemplate over, beginning tonight with the Chicago Fed national activity index. Tuesday brings existing home sales and the Richmond Fed manufacturing index, Wednesday new home sales and the FHFA house price index, and Thursday durable goods.

Thursday sees HSBC release its flash estimate of China's May manufacturing PMI and also the eurozone's estimate of the May composite (manufacturing and services) PMI, along with the influential German IFO business climate survey and a revision of the UK's March quarter GDP result.

It's quiet on the Australian economic front, with Wednesday bringing two separate leading economic index releases.

On the local stock front, James Hardie (JHX) reports its full-year result today and tomorrow Graincorp (GNC) delivers its interim before holding an investor day on Thursday.

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