Stocks Fall as Fed Chief Disappoints on Stimulus

Stocks Fall as Fed Chief Disappoints on Stimulus - US News and World Report

Stock board showing stocks up and down

By COLLEEN BARRY, Associated Press

MILAN (AP) — Global stocks dropped Friday after the U.S. Federal Reserve's chairman indicated there were no immediate plans to boost growth in the world's largest economy, wiping out gains made on China's surprise interest rate cut.

In an appearance before members of the U.S. Congress, Ben Bernanke avoided giving any signals about what the Fed might do in response to a slowdown in hiring. The 69,000 jobs created in May were the fewest in a year.

Markets, which had earlier risen Thursday on news that China had made its first interest rate cut in more than three years, fell back down on Friday.

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"Clearly sentiment is all over the place," said Chris Weston of IG Markets.

In afternoon European trading, Britain's FTSE 100 dropped 0.7 percent to 5,408. Germany's DAX lost 0.8 percent to 6,093 and France's CAC-40 fell 1.1 percent to 3,038.

Wall Street also opened lower, with the Dow Jones industrial average down 51 points at 12,410. The Standard & Poor's 500 index was down five points at 1,310.

Francis Lun, managing director of Lyncean Holdings in Hong Kong, said markets were "slightly disappointed" that Bernanke had not said the Fed would extend its Treasury bond-buying program, known as quantitative easing. The program injects money into the financial system, lowering interest rates to spur lending and growth.

"The economy is slowing much faster than people expected," he said.

China has rolled out a series of measures to stimulate the economy after growth fell to a nearly three-year low of 8.1 percent in the first quarter and April factory output grew at its slowest rate since the 2008 crisis. Private sector analysts expect this quarter's growth to fall further.

Investor concerns remained focused on Europe, where a lingering financial crisis has infected Spain and its banks.

Expectations are rising that Spain's leaders will have to seek an international bailout for banks, which credit agency Fitch estimates could reach €100 billion ($126 billion). Amid reports that Spain could ask for financial aid this weekend, the government on Friday said it would wait for results from independent reports on the financing needs of its banks. Those reports are due by June 21 at the latest.

Benchmark oil for July delivery was down $2.59 to $82.24 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 20 cents to finish at $84.82 per barrel in New York.

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In currencies, the euro fell to $1.2451 from $1.2601 late Thursday in New York. The dollar fell to 79.38 yen from 79.68 yen.

Mainland Chinese shares lost ground, with the benchmark Shanghai Composite Index falling for a fifth straight trading day, shedding 0.5 percent, or 11.68 points, to 2,281.45, the lowest closing in more than two months.

Elsewhere in Asia, Japan's Nikkei 225 index fell 2.1 percent to close at 8,459.26. South Korea's Kospi dropped 0.7 percent to 1,835.64.

____

Pamela Sampson in Bangkok and Fu Ting in Shanghai contributed to this report.

European Commission hails fish stocks revival boost - The Independent

Twenty fish stocks in European Union (EU) waters are now considered to be within sustainable fishing limits, compared with only five in 2009, fisheries Commissioner Maria Damanaki said.

The figures are rare good news after years in which fishermen have faced massive catch reductions in the name of conservation and on the promise of plenty tomorrow.

The EC has blamed successive years of enforced cuts on fleets routinely breaching catch quotas and delaying stock recovery.

Today, however, ahead of EU fisheries reform talks next week, Mrs Damanaki declared: "We are now seeing some improvements towards ending overfishing, but we need to go the extra mile and adopt Common Fisheries Policy (CFP) reform if we want to guarantee these improvements in the long term."

A commission "consultation document" looking at fishing opportunities for next year says efforts to halt overfishing are starting to work, thanks to reduced annual catch quotas in recent years.

The effectiveness of quota cuts allowed increases in the total allowable catch (TAC) for some stocks this year, says the report - with an estimated extra income for the fishing industry of 135 million euro (£109 million).

An EC statement said: "The figures show that following scientific advice when setting TACs helps fish stocks rebuild.

"As a result, fishermen are rewarded with higher catches and higher income, and the environmental impact of fishing is less."

It said the revival of stocks and the resulting income boost reinforced the need to reform the CFP to build on the benefits - because sticking to annual TAC limits alone would not be enough.

"Long-term management, a fully science-based approach and eliminating catastrophic practices such as discarding (dumping non-quota stocks caught in nets accidentally) are needed, as spelled out in the Commission proposals on CFP reform," the document added.

The EC says the scientific advice on which annual catch cuts are based is improving, with more and more stocks being assessed more accurately on the basis of the science.

The upbeat note came as lobby groups mounted a campaign against what they see as compromise proposals on EU fishing policy.

Birdlife Europe, Greenpeace, OCEAN2012, Oceana, Seas At Risk and WWF issued a joint statement warning that a proposed deal would not stop the depletion of fish stocks for another decade.

They said fisheries ministers were preparing to settle for a "lowest common denominator" deal "without any ambition to achieve sustainable fisheries or save fishing jobs".

The statement said: "Horse-trading to accommodate all member states has resulted in a significant weakening of the commission's reform proposal compared with July 2011.

"The required recovery of fish stocks by 2015 has been further delayed and the goal posts shifted.

"Ministers are only willing to commit to reduce fishing pressure progressively which would allow overfishing to continue for the next decade."

The groups claim only a quarter of fish stocks in EU waters are at sustainable levels.

"A 31 per cent decrease in fishing jobs since 2002 shows the bleakness of the European fisheries crisis which can only be remedied by a root-and-branch reform," the statement added.

US STOCKS-Futures fall as caution creeps back into market - Reuters UK

Fri Jun 8, 2012 1:29pm BST

* Sources say Spain to request EU aid over the weekend

* German imports tumbled in April

* Apple may block Samsung phone

* Futures down: S&P 500 7 pts, Dow 50 pts, Nasdaq 12 (Updates futures)

By Edward Krudy

NEW YORK, June 8 (Reuters) - U.S. stock index futures fell on Friday after an expected new round of monetary easing failed to materialize, leaving investors to chew over the slowing global economy and Europe's ongoing debt crisis.

Spain is expected to request European aid for its ailing banks over the weekend to forestall worsening market turmoil, becoming the fourth and biggest country to seek assistance since the euro zone's debt crisis began, EU and German sources said.

German imports tumbled at their fastest rate in two years in April, and exports fell more than expected, another sign Europe's largest economy is beginning to feel the chill from the euro zone debt crisis.

Rick Meckler, president of investment firm LibertyView Capital Management in New York, said traders were nervous ahead of the weekend given the uncertainty emanating from Europe.

"It does carry the risk that if the calls are not heeded, particularly by Germany, you have to come in on a Monday and deal with a meltdown situation, so that is keeping the markets from really having any meaningful recovery," he said.

The S&P 500 gave up an early rally on Thursday after Federal Reserve Chairman Ben Bernanke's did not indicate more forthcoming stimulus for the economy in remarks before a congressional committee. Hopes of a globally coordinated effort had been raised earlier in the day after China cut lending rates.

September S&P 500 futures fell 7 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 50 points, and Nasdaq 100 futures fell 12 points.

Still, the S&P 500 was on course for its best week this year after a substantial rally in the middle of the week. That came shortly after the index fell below it 200-day moving average, in what some analysts said was an oversold bounce. The strong week also comes after the worst month since September.

"The rally we had, which was pretty strong, was a bit more of a technical than a fundamental bounce and the market is struggling to find the good news to keep it going," Said Meckler.

European shares as measured by the FTSEurofirst 300 dropped 0.5 percent in morning trade, while the euro fell against the dollar and oil retreated. In Asia, Japan's Nikkei index slid 2.1 percent posting its worst string of losses since almost 1975.

McDonald's Corp fell 1.9 percent in premarket trade after the fast-food chain said global comparable sales rose 3.3 percent in May and that foreign currency translation negatively impacted second quarter earnings by 7 to 9 cents per share.

Shares in Chesapeake Energy Corp climbed 3.3 percent to $18.43 in premarket trade. The embattled company said it plans to sell its midstream assets in three transactions for total expected cash proceeds of more than $4.0 billion.

An Apple Inc lawyer said the iPhone and iPad maker may seek a legal order stopping the launch of Samsung Electronics Co Ltd's Galaxy S III phone in the United States later this month.

Best Buy Co Inc founder and chairman, Richard Schulze, resigned from the retailer's board on Thursday and said he was exploring options for his 20.1 percent ownership stake, a move seen as a possible precursor of a Schulze-led private takeover. (Ediitng by Padraic Cassidy)

Your Money: Finding new jobs and Father's Day apps - 9News

DENVER - In Friday's Your Money report, Gregg Moss has information on a new trend among experienced workers, as well as some great Father's Day app ideas for dad.

As unemployment remains a big concern for many across the country, there are some top performers who are looking for new jobs.

US STOCKS-Market edges up, focus on possible Spain rescue - Reuters UK

Fri Jun 8, 2012 5:52pm BST

* Spain likely to ask European Union for bailout-sources

* McDonald's sales miss forecast, warns on economy

* Molina Health, Centene lift healthcare stocks

* Chesapeake Energy plans to sell pipeline assets

* Indexes up: Dow 0.4 pct, S&P 0.3 pct, Nasdaq 0.5 pct (Updates to midday, changes byline)

By Chuck Mikolajczak

NEW YORK, June 8 (Reuters) - U.S. stocks edged higher on Friday as investors played things close to the vest before the weekend after sources told Reuters Spain was expected to request aid for its troubled banks.

European Union and German sources said euro zone finance ministers were to hold a conference call on Saturday. Spain's expected request was an effort to stem the tide of worsening market turmoil.

Underscoring the impact of Europe's debt crisis, McDonald's Corp reported a lower-than-expected rise in global same-store sales in May and warned austerity measures in Europe were taking a toll. Shares fell 0.9 percent to $87.60, causing one of the biggest drags on the Dow.

"Obviously the apprehension about this weekend is still out there regarding should Spain need some more money for their banks and, of course, the Greek election is next week," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, Ohio.

"It's almost like we are catching our breath, getting ready for next week, which is going to be very heavy on the European front."

Greece is scheduled to hold a general election that could decide its fate in the euro zone on June 17.

The Dow Jones industrial average gained 44.88 points, or 0.36 percent, to 12,505.84. The Standard & Poor's 500 Index added 4.46 points, or 0.34 percent, to 1,319.45. The Nasdaq Composite Index climbed 14.96 points, or 0.53 percent, to 2,845.98.

The modest gains put the S&P 500 on track for its best week of the year, due largely in part to a gain of more than 2 percent on Wednesday. The strong gains came after the benchmark index fell more than 6 percent in May and dropped just below its 200-day moving average, signaling a technical bounce for equities.

U.S. President Barack Obama said on Friday that European leaders face an "urgent need to act" to resolve the region's financial crisis as the threat of a renewed recession there spells dangers for an anemic U.S. recovery. Obama faces a U.S. election in five months.

German imports tumbled at their fastest rate in two years in April, and exports fell more than expected, another sign Europe's largest economy is not immune from the euro-zone debt crisis.

Molina Healthcare jumped 29 percent to $22.90, recouping nearly all of its losses in the prior session, and Centene Corp jumped 9 percent to $35.83 after the health insurers won contracts to continue as Medicaid plan providers in the state of Ohio. The Morgan Stanley Healthcare Payor index jumped 5 percent.

Chesapeake Energy Corp plans to sell its pipeline and related assets to Global Infrastructure Partners in three separate transactions worth more than $4 billion, as the company scrambles to plug an estimated $10 billion funding shortfall.

In addition, shareholders delivered a broad rebuke of the company's board, withholding support for two members up for re-election in the wake of a governance crisis and poor financial performance. Chesapeake shares edged up 0.5 percent to $17.94. [ID:nL4E8H88RP}

Why Money Market Funds Break The Buck - Yahoo Finance

Money market funds are often thought of as cash and a safe place to park money that isn't invested elsewhere. Investing in a money market fund is a low-risk, low-return investment in a pool of very secure, very liquid, short-term debt instruments. In fact, many brokerage accounts sweep cash into money market funds as a default holding investment until the funds can be invested elsewhere.

SEE: Money Market

Money market funds seek stability and security with the goal of never losing money and keeping net asset value (NAV) at $1. This one-buck NAV baseline gives rise to the phrase "break the buck," meaning that if the value falls below the $1 NAV level, some of the original investment is gone and investors will lose money.

This only happens very rarely, but because money market funds are not FDIC-insured, they can lose money. Find out how this happens and what you can do to keep your "risk-free" assets truly risk free

Insecurity in the Market
Even though investors are typically aware that money market funds are not as safe as a savings account in a bank, they treat them as such because, as their track record shows, they are very close. But given the rocky market events of 2008, many did wonder if their money market funds would break the buck.

In the history of the money market, dating back to 1971, there was only one fund that broke the buck until the 2008 financial crisis. In 1994, a small money market fund that invested in adjustable-rate securities got caught when interest rates increased and paid out only 96 cents for every dollar invested. But as this was an institutional fund, no individual investor lost money, and 37 years passed without a single individual investor losing a cent.

In 2008 however, the day after Lehman Brothers Holdings Inc. filed for bankruptcy, one money market fund fell to 97 cents after writing off the debt it owned that was issued by Lehman. This created the potential for a bank run in money markets as there was fear that more funds would break the buck.

Shortly thereafter, another fund announced that it was liquidating due to redemptions, but the next day the United States Treasury announced a program to insure the holdings of publicly offered money market funds so that should a covered fund break the buck, investors would be protected to $1 NAV.

Track Record of Safety
There are three main reasons that money market funds have a safe track record.

The maturity of the debt in the portfolio is short-term (397 days or less), with a weighted average portfolio maturity of 90 days or less. This allows portfolio managers to quickly adjust to a changing interest rate environment, thereby reducing risk.
The credit quality of the debt is limited to the highest credit quality, typically 'AAA' rated debt. Money market funds can't invest more than 5% with any one issuer, except the government, so they diversify the risk that a credit downgrade will impact the overall fund.
The participants in the market are large professional institutions that have their reputations riding on the ability to keep NAV above $1. With only the very rare case of a fund breaking the buck, no firm wants to be singled out for this type of loss. If this were to happen, it would be devastating to the overall firm and shake the confidence of all its investors, even the ones that weren't impacted. Firms will do just about anything to avoid breaking the buck, and that adds to the safety for investors.

Readying Yourself for the Risks
Although the risks are generally very low, events can put pressure on a money market fund. For example, there can be sudden shifts in interest rates, major credit quality downgrades for multiple firms and/or increased redemptions that weren't anticipated. Another potential issue could occur if the fed funds rate drops below the expense ratio of the fund, which may produce a loss to the fund's investors.

To reduce the risks and better protect themselves, investors should consider the following:

Review what the fund is holding. If you don't understand what you are getting into, then look for another fund.
Keep in mind that return is tied to risk - the highest return will typically be the most risky. One way to increase return without increasing risk is to look for funds with lower fees. The lower fee will allow for a potentially higher return without additional risk.
Major firms are typically better funded and will be able to withstand short-term volatility better than smaller firms. In some cases, fund companies will cover losses in a fund to make sure that it doesn't break the buck. All things being equal, larger is safer.

Confusion in the Money Market
Money market funds are sometimes called "money funds" or "money market mutual funds," but should not be confused with the similar sounding money market deposit accounts offered by banks in the U.S.

The major difference is that money market funds are assets held by a brokerage, or possibly a bank, whereas money market deposit accounts are liabilities for a bank, which can invest the money at its discretion - and potentially in (riskier) investments other than money market securities. In a money market fund, investors are buying securities and the brokerage is holding them. In a money market deposit account, investors are depositing money in the bank and the bank is investing it for itself and paying the investor the agreed-upon return.

If a bank can invest the funds at higher rates than it pays on the money market deposit account, it makes a profit. Money market deposit accounts offered by banks are FDIC insured, so they are safer than money market funds. They often provide a higher yield than a passbook savings account and can be competitive with money market funds, but may have limited transactions or minimum balance requirements.

The Bottom Line
Prior to the 2008 financial crisis, only one small institution fund broke the buck in the preceding 37 years. During the 2008 financial crisis, the U.S. government stepped in and offered to insure any money market fund, giving rise to the expectation that it would do so again if another such calamity were to occur. It's easy to conclude then that money market funds are very safe and a good option for an investor that wants a higher return than a bank account can provide, and an easy place to allocate cash awaiting future investment with a high level of liquidity. Although it's extremely unlikely that your money market fund will break the buck, it's a possibility that shouldn't be dismissed when the right conditions arise.

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Liquidation Blues: When Mutual Funds Close

Chris Hughton to get financial backing at Norwich City - BBC News

New Norwich City boss Chris Hughton has been promised the most "financial freedom" in the club's history.

The former Newcastle United and Birmingham City manager was unveiled as Paul Lambert's successor on Thursday.

"In Norwich City terms there's more financial freedom for the manager than there's ever been," chief executive David McNally told BBC Radio Norfolk.

"If we can create spare cash flows, the manager gets that. He's got a decent payroll budget and transfer budget."

Lambert, who has been named Aston Villa's new boss, was able to secure back-to-back promotions and a mid-table Premier League finish on a modest budget, buying players with little or no top-flight experience.

But a restructuring of the club's debts and a second successive year in the Premier League has put the Canaries on a solid financial footing.

"Chris has got our commitment that if any player leaves the club for money, he will get that additionally," said McNally.

"I think that's quite an attractive proposition for a hungry, committed manager like Chris Hughton. I don't think he had any spare cash to trade with at Birmingham."

McNally says Hughton will hold talks with want-away striker Grant Holt but declined to guarantee the club captain the 12-month extension he desires to his current two-year deal.

He said: "In any walk of life, you don't want colleagues to be unhappy.

"Grant Holt happy at the club will be far more effective for us than Grant Holt being unhappy.

"Who knows what will happen over the next few weeks? Chris will sit down with all 25 first-team squad members and that will include Grant."

The future of Lambert's coaching staff at Carrow Road is also uncertain.

His assistant Ian Culverhouse and coach Gary Karsa are still at the club, despite Hughton bringing his own team of Colin Calderwood and Paul Trollope to Norfolk.

However, McNally seems ready to dig his heels in if Villa come calling for Lambert's former coaching duo.

"We were encouraging Paul to extend his coaching network, we felt it was a little narrow," he said.

"As talented as Ian and Gary are, we wanted more support for those two key people, so we think this is a great opportunity to do that. (But) In the same way Grant Holt is not for sale, it doesn't stop people making offers."

Meanwhile, full-back Russell Martin has signed a new three-year deal at the club.

The former Wycombe and Peterborough United defender has amassed 113 appearances for the Canaries, including a prolonged stint at centre-half last season.

US STOCKS-Wall St lower on caution over Spain's banks - Reuters

Fri Jun 8, 2012 9:54am EDT

* Spain likely to request EU aid over the weekend -sources

* McDonald's sales miss forecast, warns on economy

* German imports tumble in April

* Chesapeake Energy plans to sell pipeline assets

* Indexes down: S&P 0.4 pct, Dow 0.4 pct, Nasdaq 0.4 pct

By Edward Krudy

NEW YORK, June 8 (Reuters) - U.S. stocks fell on Friday as investors erred on the side of caution ahead of a weekend expected to bring new developments in Spain's banking crisis.

Spain is expected to request European Union aid for its ailing banks over the weekend to forestall worsening market turmoil, EU and German sources said.

In a sign of how Europe's crisis and a slowing global economy are affecting U.S. corporations, McDonald's Corp reported a lower-than-expected rise in global same-store sales in May and warned austerity measures in Europe were taking a toll. Shares fell 2.6 percent to $86.08.

"The European banking system is under capitalized, and the markets are waxing and waning based on enthusiasm for a plan to recapitalize them," said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

"This weekend we may get some news on recapitalizing Spanish banks, and I think there is a fair amount of fear of being invested in risk assets over the weekend, because if that doesn't happen, we could easily lose that 200-plus (Dow index) points that we gained."

The Dow Jones industrial average dropped 49.65 points, or 0.40 percent, to 12,411.31. The Standard & Poor's 500 Index fell 5.54 points, or 0.42 percent, to 1,309.45. The Nasdaq Composite lost 12.02 points, or 0.42 percent, to 2,819.00.

Still, the S&P 500 was on course for its best week since March after a substantial rally in the middle of the week. That came shortly after the index fell below it 200-day moving average, in what some analysts said was an oversold bounce. The strong week also comes after the worst month since September.

"The rally we had, which was pretty strong, was a bit more of a technical than a fundamental bounce, and the market is struggling to find the good news to keep it going," said Rick Meckler, president of investment firm LibertyView Capital Management in New York.

At 10:15 a.m., President Barack Obama will make a statement on the U.S. economy, the White House said.

European shares as measured by the FTSEurofirst 300 dropped 0.8 percent, while the euro fell against the dollar and oil retreated. In Asia, Japan's Nikkei fell 2.1 percent and narrowly missed posting its worst losing streak since 1975.

Stocks: Best week of 2012 - Click2Houston.com

NEW YORK (CNNMoney) -

U.S. stocks rose Friday, capping the best week of the year, amid speculation that Spain will request a bailout for its troubled banking sector over the weekend.

The Dow Jones industrial average rose 93 points, or 0.7%, to end at 12,554. The S&P 500 gained 11 points, or 0.8%, to 1,326. The Nasdaq was up by 27 points, or 1%, to 2,858.

The major gauges all posted the largest weekly gain of 2012. The Dow rose 3.6%, the S&P gained 3.5% and the Nasdaq was 3.9% higher for the week.

Overall, the gains were driven by hopes for a coordinated intervention by global central banks to support the economy. On Thursday, China's central bank announced a surprise interest rate cut. The European Central Bank held rates steady at its meeting Wednesday, but many analysts expect the ECB to cut rates next month.

Federal Reserve chairman Ben Bernanke told lawmakers Wednesday that the U.S. central bank stands ready to act, but he offered no hint that additional stimulus measures are imminent. Bernanke's comments came after other Fed officials suggested the bank could extend a policy of reinvesting proceeds from assets on its balance sheet into the Treasury market, known as Operation Twist.

"There's a lot of uncertainty out there," said Bernard Kavanagh, vice president of portfolio management for St. Louis-based broker Stifel Nicolaus. "I'm surprised we didn't see more selling given the strong week we've had."

Investors gravitated towards stocks that are considered defensive, including consumer staples such as Walmart and Coca-Cola.

Meanwhile, investors remain focused on Europe, particularly the banking crisis in Spain.

Spain could formally request bailout funds from the European Union as soon as this weekend, according to Reuters. But EU officials and the Spanish government say a request for help will not be made until a full assessment of the banking sector is complete.

On Thursday, Fitch slashed Spain's credit rating three notches to 'BBB' from 'A.' The ratings agency pointed to the estimated cost of a Spanish bank bailout, which it said is likely to cost between €60 billion and €100 billion. Fitch also said it expects a prolonged recession in Spain that will run throughout 2013.

The yield on 10-year Spanish bonds rose to a high of 6.6% last week, prompting a warning from the nation's Treasury minister that the government is in danger of being priced out of the market. But yields eased this week following a successful bond auction on Thursday and are now around 6.2%.

Joseph Saluzzi, co-head of equity trading at Themis Trading, said traders do not want to bet the market will fall Monday in case EU leaders announce a rescue plan for Spain over the weekend.

"The shorts have been burned time and again," he said. "No one wants to come in here and take a stand."

U.S. stocks ended mixed Thursday, trimming gains from earlier in the day. Investor sentiment remains in the "extreme fear" range on CNNMoney's Fear & Greed index, although it has eased in the last few days.

World markets: European stocks closed lower. Britain's FTSE 100 and the DAX in Germany both fell 0.2%. France's CAC 40 declined 0.6%.

Asian markets ended Friday trading lower, reacting to both the Chinese rate cut and Bernanke's comments. The Shanghai Composite closed down 0.5%, the Hang Seng in Hong Kong lost 0.9%, and Japan's Nikkei fell 2.1%

Economy: The U.S. trade deficit for April came in at $50.1 billion, roughly in line with forecasts of analysts by Briefing.com, and down from the revised $52.6 billion in March.

Wholesale inventories for April rose by 0.6%, after increasing by 0.3% in the month prior.

Companies: Shares of International Game Technology edged up after the gaming firm announced late Thursday that it had received a recommendation for an online gaming license from the Nevada Gaming Control Board.

Shares of Molina Healthcare jumped after the company announced late Thursday that Ohio had endorsed its bid to continue as a health care provider for the state's Medicaid beneficiaries.

Shares of McDonald's and KFC-owner Yum! Brands declined Friday amid growing fears about slowing economic growth in China. McDonald's announced that its sales at stores open at least a year in Asia, the Middle East and Africa regions declined 1.7% in May, with particular weakness in Japan and China.

JPMorgan shares rose 2.5%. The bank's CEO, Jamie Dimon, will appear in front of the Senate Banking Committee Wednesday to answer questions about the company's $2 billion loss.

Currencies and commodities: The dollar gained against the euro and the British pound, but slipped versus the Japanese yen.

Oil for July delivery continue its slide, losing 72 cents to settle at $84.10 a barrel.

Gold futures for June delivery rose $3.40 to end at $1,591.40 an ounce, reversing earlier losses.

Treasuries Gain as Stocks Fluctuate; Oil, Euro Retreat - Bloomberg

U.S. stocks rose, driving the Standard & Poor’s 500 Index to the best weekly gain of the year, while the euro fell as investors awaited weekend talks among European finance officials for news of a potential bailout of Spain. Oil trimmed an early drop and Treasuries pared gains.

The Standard & Poor’s 500 Index advanced 0.8 percent to 1,325.66 at 4 p.m. New York time, extending its rally this week to 3.7 percent. It had fallen as much as 0.6 percent today. Oil recovered most of a 3.3 percent plunge and the S&P GSCI gauge of 24 commodities slipped 0.7 percent after sinking as much as 2.4 percent. The euro weakened 0.5 percent to $1.25 after Spain’s credit ranking was cut three steps by Fitch Ratings yesterday. The 10-year Treasury yield lost less than one basis point to 1.63 percent after declining as much as eight points.

Spain is poised to become the fourth of the 17 euro-area countries to require emergency assistance as the currency bloc’s finance chiefs plan weekend talks on a potential aid request to shore up the nation’s lenders. German exports dropped in April for the first time this year and industrial output in Italy fell more than economists estimated, reports showed today. Global stocks rallied this week as speculation mounted that policy makers will act to spur growth.

“The risk-on trade emerged,” said Walter “Bucky” Hellwig, who helps manage $17 billion at BB&T Wealth Management in Birmingham, Alabama. “There’s more of a conviction that something is going to happen with Spanish banks that’s going to be positive. Anything that could address the situation in a favorable way could have a positive impact.”

Intel, Facebook

Wal-Mart Stores Inc., JPMorgan Chase & Co. and Home Depot Inc. rose more than 2 percent to lead gains in the Dow Jones Industrial Average, which rallied 93.24 points to 12,554.20. Facebook Inc., which this week fell to the lowest price since it went public, advanced 3 percent. Alpha Natural Resources Inc. slumped 2.6 percent as the nation’s second-biggest coal producer said it will shut mines in Kentucky and closing U.S. regional offices.

Stocks reversed an early rally yesterday after Federal Reserve Chairman Ben. S. Bernanke said the Fed will need to assess conditions before deciding if more measures are required to stoke an economy threatened by Europe’s debt crisis and U.S. budget cuts.

U.S. Treasuries

Treasury 30-year bond yields reversed a retreat of as much as nine basis points, ending little changed at 2.74 percent. The 10-year note’s yield increased 18 basis points this week, the most since March. After markets closed in New York, S&P affirmed the U.S. credit rating and maintained a negative outlook, reflecting the company’s opinion that political and fiscal credit risks could build to the point of lowering the AA+ long- term rating by 2014.

The Stoxx Europe 600 Index slipped 0.3 percent, after falling as much as 1.4 percent. A gauge raw-material producers slumped 2.8 percent for the biggest decline among 19 groups. BHP Billiton Ltd., the world’s biggest mining company, slid 2.9 percent and Rio Tinto Group retreated 4.8 percent. The regional benchmark rose 2.9 percent in the week, its biggest gain since February.

Barclays Plc decreased 1.3 percent as the Financial Times reported that Chief Executive Officer Bob Diamond has postponed his goal of reaching a 13 percent return on equity by 2013. The newspaper cited unidentified people close to the bank. Lamprell Plc, an oil and gas rig engineer, slumped 22 percent after cutting its profit outlook for the second time in a month.

Currencies

The euro, which depreciated 0.6 percent versus the yen, was set for its first weekly gain against the dollar in six. The Dollar Index, which tracks the U.S. currency against those of six trading partners, jumped 0.5 percent today while retreating on a weekly basis for the first time since April. The yen strengthened against 12 of 16 of its most-traded peers.

The cost of insuring against losses on Germany’s sovereign debt rose for a sixth day with credit-default swaps linked to bunds adding two basis points to 108 basis points, the highest since January. The yield on its sovereign 10-year bund dropped five basis points to 1.33 percent, paring the rate’s first weekly advance in 12. The Spanish 10-year bond yield rose 13 basis points to 6.22 percent, after falling for six straight days, and swaps on government debt rose 16 basis points to 588.

Oil slipped 0.8 percent to $84.10, recovering from a drop of as much as 3.3 percent and rising on a weekly basis for the first time since April.

The MSCI Emerging Markets Index slumped 0.9 percent, paring its first weekly gain since March to 1.3 percent. The Hang Seng China Enterprises Index of mainland stocks slipped 1.3 percent before data tomorrow on China’s inflation, industrial output and investment. Taiwan’s Taiex index slipped 1.1 percent and South Korea’s Kospi lost 0.7 percent.

To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Rita Nazareth in New York at rnazareth@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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Stocks Pare Weekly Advance as Oil Declines on Bernanke Comments

Andrew Harrer/Bloomberg

Federal Reserve Chairman Ben S. Bernanke said the Fed will need to assess conditions before deciding if more measures are required to stoke an economy threatened by Europe’s debt crisis and U.S. budget cuts.

June 8 (Bloomberg) -- Rahul Chadha, head of Asia Pacific investment division for Mirae Asset Global Investments in Hong Kong, talks about China's rate cut, its implications for global financial markets and his investment strategy. Chadha also discusses the European sovereign debt crisis. He speaks with Zeb Eckert on Bloomberg Television's "First Up." (Source: Bloomberg)

June 8 (Bloomberg) -- Nariman Behravesh, chief economist at IHS Global Insight, talks about the outlook for the U.S. economy, Federal Reserve Chairman Ben S. Bernanke’s testimony before the Joint Economic Committee yesterday and the prospects for further quantitative easing by the Fed. Behravesh speaks with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg)

June 8 (Bloomberg) -- Zhu Haibin, chief China economist at JPMorgan Chase & Co. in Hong Kong, talks about the nation's economy and monetary and fiscal policies. China cut borrowing costs for the first time since 2008 and loosened controls on banks’ lending and deposit rates, stepping up efforts to combat a deepening slowdown as Europe’s debt crisis threatens global growth. Zhu speaks with Rishaad Salamat on Bloomberg Television's "Asia Edge." (Source: Bloomberg)

June 8 (Bloomberg) -- Liu Yang, chairwoman of Atlantis Investment Management Ltd., talks about China's central bank monetary policy, economy and stock market. Liu also discusses Chinese Communist Party leadership. She speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

June 8 (Bloomberg) -- Lincoln Ellis, chief investment officer for Strategic Financial Group, talks about the outlook for U.S. stocks and Federal Reserve monetary policy. Ellis also discusses China's cut in borrowing costs and Europe's debt crisis. He speaks from Chicago with Zeb Eckert on Bloomberg Television's "First Up." (Source: Bloomberg)

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Asian Stocks Fall as Bernanke Comments Overshadow China Rate Cut

Kiyoshi Ota/Bloomberg

The MSCI Asia Pacific Index has climbed 0.9 percent this week on mounting anticipation that policy makers will act to spur growth. The gauge plunged 14 percent from a six-month high in February through last week as U.S. economic data trailed estimates and concern grew about Greece’s future in the euro and Spain’s deteriorating national finances.

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Friday, June 8, 2012