Stocks fell Friday as oil prices were again on the rise and a new report showed the U.S. housing market continuing its decline.
Also, Anheuser-Busch (BUD) may be purchased by Belgian Brewer InBev (INTB). FT Alphaville says InBev is preparing a $46 billion bid for its rival.
Gap (GPS) managed to boost profits 40% last quarter despite the tough retail environment.
On Friday morning, the Dow Jones industrial average fell 106.58 points, or 0.84%, to 12,519.04. The broader S&P 500 index lost 13.66 points, or 0.98%, to 1,380.69. The tech-heavy Nasdaq composite index dropped 18.45 points, or 0.75%, to 2,446.13.
S&P expects slow trading on Friday ahead of the three-day Memorial Day weekend.
Oil prices dropped from record levels on Thursday, but were back up Friday morning. On the NYMEX, crude oil for July delivery was trading up $1.86 to $132.67 per barrel.
One reason for oil's rebound on Friday is short-covering after Thursday's price drop, Standard & Poor's MarketScope says. Another reason, according to Action Economics, is a new government forecast of a more active hurricane season in the U.S. As many as six to nine storms could form, with two "major events," the National Oceanic and Atmospheric Administration says.
The first quarter was "one of the most difficult retailing environments in recent memory," Gap chairman Glenn Murphy said. However, Gap managed inventory and cut costs in ways that enabled the clothing retailer, which owns the Gap, Banana Republic and Old Navy brands, to report earnings of 34 cents per share, vs. 22 cents a year ago. Revenue fell 5% to $3.38 billion.
In April, U.S. existing home sales fell 1% to a annual rate of 4.89 million -- down 17.5% from a year ago. The number of homes on the market was way up, from a 10-month supply in March to a 11.2-month supply last month. The median sales price rose from $200,100 to $202,300.
Among stocks in the news Friday, Monsanto (MON) says it has made a deal with Syngenta AG that will expand the commercial availability of its Roundup Ready 2 Yield soybean technology, growing the product's potential available acreage by 10% in the U.S.
Wellcare (WCG) plans to cut its workforce by 5%. The insurance firm blamed the layoffs on changing business conditions.
Dillard's (DDS) posted earnings of 4 cents per share, vs. 53 cents a year ago, as same-store sales fell 6% and total sales dropped 4.8%. The retailer plans to close under-performing stores, reduce capital expenditures, cut costs and change its merchandise mix.
Aeropostale (ARO) reported earnings of 26 cents, vs. 18 cents a year ago, as same-store sales rose 10% and total sales rose 22%.
Foot Locker (FL) posted earnings of 14 cents per share, vs. 11 cents a year ago, as same-store sales fell 2.9% and total sales dropped 0.5%.
Major European indexes were lower Friday. In London, the FTSE 100 index lost 0.62% to 6,143. Paris' CAC 40 index dropped 0.89% to 4,983.99, and Germany's DAX index moved 0.8% lower to 7,013.58.
In Asia, Japan's Nikkei 225 gained 0.24% to 14,012.20, while Hong Kong's Hang Seng index lost 1.31% to 24,714.07.
Treasury market
Bond prices were higher Friday. The two-year note rose 02/32 to 99-10/32 for a yield of 2.49%; ten-year notes rose 12/32 to 100-01/32 for a yield of 3.87%; and the 30-year Treasury gained 23/32 to 96-23/32 for a yield of 4.58%.