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  • Dow Jones Industrial Average down 74.92 (-0.60%) to 12,454.83
  • S&P 500down 2.86 (-0.22%) to 1,317.82
  • Nasdaq Composite Index down 1.85 (-0.07%) to 2,837.53

GLOBAL SENTIMENT

  • Hang Seng Index up 0.25%
  • Shanghai China Composite Index down 0.74%
  • FTSE 100 down 0.01%

U.S. stocks turned solidly lower this afternoon, snapping a four-day winning streak for the S&P 500. Equities were little changed for much of the session before grinding lower over the final two hours. Surprise strength in consumer sentiment kept stocks bobbing back above water earlier in the day but worries about events in Europe eroded optimism and gradually wore down prices. Eight of the 10 industry sectors in the S&P 500 finished in the red with utility and telecom stocks the lone sectors to finish higher. Commodities also ended moderately higher.

Equities ticked higher earlier after a gauge of consumer attitudes climbed to its best level in over four years. The Thomson Reuters/University of Michigan consumer sentiment index climbed to a final 79.3 reading for May, up from 76.4 last month and topping the preliminary 77.8 reading reported earlier this month. Experts polled by Bloomberg, on average, had expected the final reading to match the preliminary 77.8 call.

Americans' perceptions of both current and future conditions rose, with current sentiment rising to 87.2 from 82.9 the prior month. The index of consumer expectations six months from now, often seen as a measure of consumer-spending trends, increased from 72.3 in April to 74.3 this month, its highest reading the highest since July 2007.

But many traders had a difficult time shaking concerns over global growth and Europe's debt crisis. News that Spain's Catalonia state is having problems selling new debt had stocks retreating this morning, with Reuters quoting Deputy Prime Minister Soraya Saenz de Santamaria that the Spanish government is analyzing "with all caution" requests from regional governments to help them regain access to capital markets.

Also today, the U.S. Treasury Department again declined to formally accuse China of currency manipulation while still asserting the yuan remains "significantly undervalued." The department is continuing to "closely monitor" the value of the yuan compared to the dollar and other currencies, according to the Treasury's semi-annual report to Congress on exchange-rate policies. It also will press for changes that yield more exchange-rate flexibility.

In company news, Talbots Inc. (NYSE:TLB) shares fell nearly 38% after the women's clothing retailer said its exclusivity agreement with potential buyer Sycamore Partners expired without a deal. The company said it remains open to pursuing a deal with Sycamore at $3.05 a share and will actively explore other options.

New York-based Sycamore has owned a 9.9% stake in the company since last August, striking an exclusivity agreement with TLB earlier this month after raising its original bid by 5 cents. The agreement expired on Thursday following two extensions.

Commodities ended mostly higher. Crude oil for July delivery is up 33 cents at $90.99 a barrel while June natural gas is down 8.2 cents at $2.565 per 1 million BTU. June gold rose $12.10 to finish at $1568.80, July silver rose $0.30 to $28.42, while July copper rose 2 cents to $3.44.

UPSIDE MOVERS

(+) BLOX, Q3 EPS, revenues beat estimates; guides Q4 above Street.

(+) CHK, Carl Icahn said to own 4% stake; Blackrock buys another 4 million shares.

(+) GNOM, No real news but plenty of takeover chatter online.

(+) UPI, Two new R&D initiatives expanding neuromodulation technology.

(+) FRO, Reports surprise Q1 profit, sees improved Q2, lifting other shippers.

DOWNSIDE MOVERS

(-) ROSG, Plans to sell 570,000 shares in registered direct offering.

(-) NYMT, Launches public offering of 4 million shares.

(-) PAY, Q3 guidance trailed Wall Street expectations.

(-) DCTH, Selling 13.3 million shares and 4 million warrants in bid to raise $20 million.

Source: Stocks Wobble Into Holiday Weekend