Groupon files for $750 million IPO as stocks struggle

Updated: 9:15 p.m. ET

Stocks struggled all day on Thursday, but excitement ramped up over daily-deals site Groupon's $750 million initial public offering.

The company filed the papers for the offering this afternoon. The deal suggests a valuation of $20 billion for the company, even though it's still losing money.

The news came as the market struggled with worries about the economy. But sharp losses faded on a rebound in bank stocks and hopes for an aid deal for Greece.

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The big concern for many investors is what Friday's important payrolls and unemployment report for May will show. Wall Street has cut its expectations for 190,000 job gains to 170,000 or less.

The Dow Jones industrials ($INDU) closed down 42 points to 12,249. Its second loss in a row came on a volatile day; the blue chips had been down nearly 100 points at 11:40 a.m. ET and slightly positive shortly after 3 p.m. The Standard & Poor's 500 Index ($INX) was off 2 points at 1,313. The Nasdaq Composite Index ($COMPX) was up 4 points to 2,773.

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Groupon's charge: To be as strong an IPO as LinkedIn
Groupon's IPO suggests a valuation for the company of some $20 billion and will be one of the most closely followed IPOs of the year.

The $750 million initial public offering will be led by Morgan Stanley, Goldman Sachs and Credit Suisse.

Groupon generated revenue of $644 million in the first quarter, up from $44 million a year ago. The company had revenue of $713 million for all of 2010. But the company lost $147 million. A big reason appears to be the cost of subscriptions. Ticker symbol will be GRPN.

The Groupon filing comes two weeks after LinkedIn (LNKD) went public on May 19.

LinkedIn offered shares at $45. The stock skyrocketed to as much as $122.70 and settled at about $94 on the first day. LinkedIn shares closed up 1.5% today to $78.63, giving the professional networking company a capitalization of about $7.32 billion.

The gaudiness of the Groupon offering raises again the question of whether the prices for LinkedIn, Groupon and others are too high.

What's weighing on the market
Absent a sizable reversal Friday, the major averages are headed toward their worst weekly performances since the Japanese earthquake and tsunami in March. 

The worries about the economy grew today when the Labor Department said jobless claims fell from the week before -- but not as much as expected.

The big question is how the jobs numbers and unemployment rate will work out when the Labor Department releases its May report at 8:30 a.m. ET. The consensus seems to be that the economy added 150,000 in May, with the unemployment rate holding at around 9%.

Factory orders in April fell more than expected, and retailers reported spotty sales gains for May.

Energy prices -- New York close
			Thur.			Wed.			Month chg.			YTD chg.
Crude oil (-CL)			$100.40			$100.29			-2.24%			9.87%
(per barrel)
Heating oil (-HO)			$3.0439			$3.0087			-0.30%			19.66%
(per gallon)
Natural gas (-NG)			$4.7940			$4.6290			2.74%			8.83%
(per mil. BTU)
Unleaded gasoline (-RB)			$2.9677			$2.9773			-5.80%			20.97%
(per gallon)
Brent crude			$115.54			$114.53			-1.02%			21.94%
(per barrel)
Retail gasoline			$3.7840			$3.7750			0.11%			23.18%
(per gallon; AAA)

A deal on Greece helps stocks
The market's recovery this afternoon was due in part to reports that Greece will announce fresh austerity measures on Friday in an effort to restore waning confidence in its economic performance a year after securing €110 billion ($159 billion) in emergency loans, the biggest bailout in Western history. The deal comes after weeks of intense negotiations with its international creditors.

Greek Prime Minster George Papandreou, who is facing mounting domestic opposition, will present new cost-cutting policies deemed vital for the European Union and the International Monetary Fund to release a fifth cash injection of €12 billion (or $17.3 billion) to the debt-stricken country.

Energy, metals recover some of their losses
Energy and metals prices also were moving off their lows. Crude oil (-CL) in New York settled up 11 cents to $100.40 a barrel; crude had fallen to as low as $98.46. Brent crude, the benchmark North Sea oil, was up $1.10 to $115.63.

Gold (-GC) settled down $10.50 to $1,532.70 but was moving higher in electronic trading.Silver (-SI) settled off $1.492 to $36.202 an ounce. That's a 4% decline. But like gold, it was drifting higher. Copper settled down 2.2 cents to $4.0845 a pound.

Crude oil was the reason for the Dow's sudden drop to a loss of 100 points. The cause was a government report showing much larger domestic inventories than expected. That pushed Chevron (CVX) to as low as $100.36, a 2.1% decline. But the shares recovered a bit to $101.12, down 1.3%. Exxon Mobil (XOM) was off 0.9% to $81.33.

While energy shares were weakening, the market's strength, such as it was, could be found in industrial and semiconductor stocks.Construction-equipme​nt maker Caterpillar (CAT), was the Dow leader, up 0.9% to $102.19. Caterpillar was following Joy Global (JOYG), up 5.4% to $90.51. Intel (INTC), meanwhile, was up 0.4% to $22.09,

Moody's may downgrade Bank of America, Citigroup and Wells Fargo
Financial stocks initially sagged after Moody's said it was reviewing Bank of America (BAC), Wells Fargo (WFC) and Citigroup (C) for possible downgrades.

The Moody's announcement comes as the rating agency has concluded that rules to implement the Dodd-Frank financial reform bill may mean the government won't ever save a big bank from failure.

The three banking giants have seen their stocks and bonds rise in value on the assumption big banks will be assisted in a crisis.

While letting all banks fail sounds dire, Moody's noted that any failure would be followed by an orderly liquidation of the banks to avoid disrupting financial and credit markets.

Perhaps because of that reality, Citigroup shares rose 0.9% to $40.01 after dropping to as low as $39.10. Bank of America was up 0.4% to $11.29 after dropping to as low as $11.08. Wells Fargo was up 0.8% to $27.16 after falling to as low as $26.37.

Meanwhile, Goldman Sachs (GS) shares closed down 1.3% to $134.38 after the financial giant was subpoenaed by the Manhattan District Attorney's Office, which was seeking information on the firm’s activities leading into the credit crisis.

Moody's: U.S. could be downgraded if debt limit not raised
Moody's warned that it would expect to place the U.S. government credit rating on review for a possible downgrade if the government fails to increase its debt limit.

"If the debt limit is raised and default avoided, the Aaa rating will be maintained," the rating agency said.

But it also warned that the nation's debt rating outlook will depend on the outcome of negotiations on deficit reduction. That caused bond prices to weaken and interest rates to move higher. The 10-year Treasury rose to 3.03% from Wednesday's 2.97%.

Gas nearing $4 hits retail sales
So, it was a mediocre month for retailers. Seeking Alpha noted that 15 retailers it tracks missed May sales estimates. Only eight beat the consensus numbers.

Retailers catering to the affluent did well. Saks (SKS), parent of Saks Fifth Avenue, and Nordstrom (JWN) reported better-than-expected​ sales. Saks rose 1.4% to $11.21. Nordstrom fell 1.3% to $44.47.

But those catering to middle-class customers did less well. Wal-Mart Stores (WMT) was the worst performer of the 30 Dow stocks, down 1.4%, and it didn't even report sales. Home Depot (HD) was off 0.9% to $35.09. Target (TGT) reported a 2.8% gain; analysts had expected 3.5%. Shares fell 1.3% to $47.95.

"When all is said and done, higher food and gasoline prices, a sluggish economy, and price-minded shoppers are taking their toll on big U.S. retailers," IHS Global Insight economist Chris Christopher said in a note to clients.

For-profit colleges catch a break
Shares across the education sector were rising after the Department of Education reached its highly anticipated ruling on gainful employment regulations.

The final ruling was less strict than expected, giving for-profit education providers a big boost. Apollo Group (APOL), operator of the University of Phoenix chain, was up 11.2% to $46.90; Corinthian Colleges (COCO) jumped 26.8% to $5.06. Education Management (EDMC) was rising 22% to $24.76, and Strayer Education (STRA) had risen 18.9% to $144.95.

Short hits from the markets -- New York close
			Thur.			Wed.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.040%			0.040%			-20.00%			-66.67%
5-year Treasury note			1.650%			1.609%			-2.25%			-18.15%
10-year Treasury note			3.030%			2.966%			-0.66%			-8.32%
30-year Treasury bond			4.251%			4.151%			0.83%			-2.54%
Currencies
U.S. Dollar Index			74.375			74.731			-0.43%			-6.20%
British pound			$1.6348			$1.6332			-0.74%			4.76%
(in U.S. $)
U.S. $ in pounds			£0.612			£0.612			0.74%			-4.54%
Euro in dollars			$1.445			$1.433			0.13%			8.02%
(in U.S. $)
U.S. $ in euros			€ 0.692			€ 0.698			-0.13%			-7.43%
U.S. $ in yen			81.037			80.860			-0.73%			-0.41%
U.S. $ in Chinese			6.509			6.475			0.11%			-1.61%
yuan
Canada dollar			$1.022			$1.024			-1.13%			1.89%
(in U.S. $)
U.S. dollar			$0.979			$0.977			1.15%			-1.85%
(in Canadian $)
Commodities
Gold (-GC)			$1,532.70			$1,543.20			-0.27%			7.83%
(per troy ounce)
Copper (-HG)			$4.0845			$4.107			-2.23%			-8.15%
(per pound)
Silver (-SI)			$36.202			$37.694			-5.49%			17.02%
(per troy ounce)
Wheat (-ZW)			$7.6975			$7.5925			-1.60%			-3.08%
(per bushel)
Corn (-ZC)			$7.665			$7.5850			2.54%			23.13%
(per bushel)
Cotton			$1.6424			$1.6097			3.51%			13.42%
(per pound)
Coffee			$2.61			$2.56			-1.27%			0.0862786
(per pound)
Crude oil (-CL)			$100.40			$100.40			-2.24%			9.87%
(per barrel)