Stocks closed mixed Friday in a tight range and commodities fell as investors digested downbeat news that JPMorgan Chase & Company (NYSE: JPM) incurred massive losses on risky trades and the likelihood of Greece leaving the euro zone.
Add to that a report of weak Chinese construction and declining purchases of factory equipment in the world's second-biggest economy and the market had lots of reasons to cut commodity prices and put a lid on equity gains.
Fitch issued a warning to the euro zone: Greece's exit from the single currency would adversely affect the ratings on all euro members' sovereign debt.
Stocks. The Dow Jones Industrial Average and the S&P 500 both declined modestly while the tech-heavy Nasdaq Composite was virtually unchanged. Gainers included New York-based job search engine Monster Worldwide Incorporated (NYSE: MWW), whose stock price rose nearly 20 percent after LinkedIn Corporation (NYSE: LKND) and others expressed interest in buying the company. The big losers on the day were bank stocks.
Bonds. Yields on the benchmark U.S. 10-year note declined to 1.84 percent from 1.89 percent as investors dumped bank stocks and sought shelter from the storm caused by JPMorgan's report of huge trading losses. U.S. bond yields have been on an eight-week decline reflecting concern that the U.S. economic recovery is slowing.
Currencies. The euro lost value for a second week and touched a three-month low against the dollar. The Canadian dollar strengthened against its U.S. counterpart on positive employment data. Mexico's peso and the Brazilian real fell as risk-aversion sent investors seeking safer currencies.
Commodities. Except for live hogs and lumber, agricultural commodities declined. Crude oil declined on the disappointing Chinese news plus word of burgeoning crude oil supplies. Gold hit a low for the year as investors sought the safety of the greenback. Heating oil and gasoline declined while natural gas continued its upward correction. Copper also declined.