Facebook's stock takes steep slide

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AP An Instagram photo is shared with Facebook on an iPhone in New York. (AP Photo/Karly Domb Sadof)

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May 21, 2012

Facebook's stock takes steep slide

Anonymous Associated Press Mon May 21, 2012, 10:05 AM CDT

NEW YORK — Stocks rose Monday morning as investors latched onto a survey suggesting that economists are more optimistic about housing and unemployment.

It's the first gain for the Dow Jones industrial average after six straight days of losses. However a tense undercurrent created by continued tension in Europe, and a steep slide in Facebook's stock, reminded investors that the market is far from healed.

The Dow rose 80 points to 12,449 at midmorning Monday. The Standard & Poor's 500 index rose 11 to 1,306. The Nasdaq composite rose 28 to 2,807.

The most recent report from the National Association for Business Economists showed that its forecasters expect modest growth for the remainder of the year, with the pace picking up in 2013.

That mildly cheerful news seemed to be just a small oasis in a grim desert. The 54 economists who took part in the survey also said they expect consumer spending, business investment and gross domestic product will remain below historic norms. Oil prices rose after Iraq's central government told its Kurdish residents that they must get approval for their oil deals with Turkey.

Lowe's Cos., the world's second largest home improvement chain, posted a 14 percent jump profit for its first quarter, but the stock slumped 9 percent because the company lowered its full-year earnings forecast. That raised concerns that some of the hiring and retail sales of the first quarter weren't signs of the economy actually recovering, but an anomaly caused by an unusually mild winter that encouraged people to do home renovations a few months earlier than they otherwise would.

The Group of Eight summit over the weekend at Camp David produced a joint statement from German Chancellor Angela Merkel, new French President Francois Hollande and U.S. President Barack Obama calling for growth-promoting solutions to the European debt crisis, not just cost cutting.

But tension and uncertainty lingered. Germany's deputy finance minister told a radio station that "eurobonds," debt that Germany and other strong countries would back to prop up weaker countries like Greece and Portugal, were "a prescription at the wrong time with the wrong side effects." Bankia, a bank nationalized by the Spanish government, was ordered to come up with more money to set aside for bad loans in order to meet the government's requirements.

Facebook slid 11 percent to $33.92, below its initial public offering price of $38. Its market debut on Friday was marred by technical problems.

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Facebook's stock takes steep slide

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