Stocks sag on report GM is pulling Facebook ads

Updated: 9:12 p.m. ET

Stocks fell back in afternoon trading as crude oil (-CL) dropped below $94 a barrel for the first time since December and dragged energy prices lower. Worries grew about a possible financial collapse in Greece.

Meanwhile, Facebook's initial public offering took a blow today when The Wall Street Journal said General Motors (GM) plans to stop advertising on the social-networking site, saying the company's marketing executives determined their paid ads had little impact on consumers. The breaking of the story accelerated the market's late-day pullback.

Facebook's big selling point is that its huge user base represents a powerful tool for advertisers to reach customers. But GM, which has been spending $10 million a year with Facebook, found that the ads had little effect, the Journal said. What was working was the $30 million that GM is spending creating pages on Facebook.

Facebook is to price its initial public offering Thursday, with trading set to start on Friday. Late Tuesday, it had boosted the price range for the IPO to $34 to $38 a share, implying the company could go public with a market capitalization of better than $104 billion. The original range was $28 to $35 a share.

The Dow Jones industrials ($INDU) closed down 63 points to 12,632. The Standard & Poor's 500 Index ($INX) was off 8 points to 1,331. The Nasdaq Composite Index ($COMPX) fell 9 points to 2,894, while the Nasdaq-100 Index ($NDX) was off 10 points to 2,581.

Apple (AAPL), down $5.05 to $553.17, subtracted more than 6 points from the Nasdaq-100.

Futures trading suggests the market will open higher on Wednesday. Crude oil (-CL), gold (-GC) and silver (-SI), which were lower today, were moving lower again in overnight trading.

Earnings are due from Abercrombie & Fitch (ANF), Deere (DE) and Staples (SPLS).

J.C. Penney shares battered by worse-than-expected results
In after-hours trading today, J.C. Penney (JCP) shares were down 10.6% to $29.80 after the department-store operator suspended its dividend and cut its guidance for the year.

The company lost 25 cents a share in the first fiscal quarter after one-time charges. That was 15 cents more than expected. Revenue of $3.15 billion was down 20% from a year ago and missed Street estimates by $300 million.

The company no longer expects to meet its 2012-13 goal of earnings of $1.59 a share using generally accepted accounting. It affirmed its non-GAAP guidance of$2.16 a share.

Rivals Target (TGT) and Wal-Mart Stores (WMT) report results on Wednesday and Thursday, respectively. Macy's (M), another rival, was up 33 cents to $37.01.

Market slump accelerates after Facebook news
The market was slowing anyway when the Journal published its Facebook story online, sending out promotions for it just before 3:15 p.m. ET. The slide accelerated until the Dow was off as many as 82 points. Technology shares, which had been higher for much of the day, fell even more.

Zynga (ZNGA) shares did manage to rise 61 cents to $8.56.

Driving the pre-Facebook slide was the decline in energy shares as well as investor worries about Europe and Greece and whether growth is stalling in the United States.

A bank run and new elections in Greece
Greek worries surged as President Karolos Papoulia was forced to say he would call for new elections, probably in mid-June. There was more -- and louder -- talk that Greece might leave the eurozone. Greek stocks tumbled. So did European stocks overall.

As important, he noted in a news conference that Greeks are pulling money out of their banks today. His estimate was 700 million euros, or $890 million by 4 p.m. in Athens, 9 a.m. ET.

Energy prices -- New York close
			Tues.			Mon.			Month chg.			YTD chg.
Crude oil (-CL)			$93.98			$94.78			-10.38%			-4.91%
(per barrel)
Heating oil (-HO)			$2.933			$2.9295			-7.89%			0.65%
(per gallon)
Natural gas (-NG)			$2.5000			$2.4310			9.41%			-16.36%
(per mil. BTU)
Unleaded gasoline (-RB)			$2.9441			$2.9590			-5.78%			10.79%
(per gallon)
Brent crude			$112.24			$111.57			-6.11%			4.53%
(per barrel)
Retail gasoline			$3.7270			$3.7270			-2.33%			13.77%
(per gallon; AAA)

JPMorgan shares rise, but the FBI is looking into big loss
Shares of JPMorgan Chase (JPM) faded with the market but ended up 45 cents for the day at $36.24 as Wall Street concluded -- at least for today -- that JPMorgan's big $2 billion trading loss was going to be contained. The shares had peaked at $37.27 around 12:30 p.m. ET.

CEO Jamie Dimon told shareholders at the company's annual meeting (which lasted maybe an hour) that the company's dividend would remain at $1.20 per share.

Several news reports said the Federal Bureau of Investigation has begun a preliminary probe of the trading loss, joining the Securities and Exchange Commission and others. It's not clear if the probe has identified anyone who might be accused of wrong-doing.

Retail and homebuilding shares were higher, however. TJX Companies (TJX), the parent of TJ Maxx, was up $2.75 to $42.45 and the top-performing S&P 500 stock after reporting better-than-expected​ quarterly results.

Homebuilders Lennar (LEN) and D.R. Horton (DHI) were the third- and fifth-best S&P 500 performers after a new survey showed builder confidence reaching the highest level since 2007.

European growth isn't so bad
Until Greek President Papoulia said he would call for new elections, the market had been cheered by a report showing Germany's economy growing decently, with French economic growth flat.

Germany's economy expanded by 1.7% in the first quarter over a year ago. Economists had been expecting growth of 0.1% from the fourth quarter and 0.8% year over year.

Economic growth in the eurozone overall was flat, according to a report today, while economists had expected a 0.2% decline.

But that didn't help stocks in Europe. Germany's Xetra Dax Index ($DE:DAX) dropped 51 points to 6,401. France's CAC-40 Index ($FR:PX1) dropped 19 points to 3,029. Shares of Credit Agricole (CRARY), one of France's three largest banks, dropped 16 cents to $1.90 in New York. Deutsche Bank (DB) was off $1.07 to $37.08.

Home Depot shares slip despite boosting guidance
Home Depot (HD) shares were off $1.21 to $48.67 after falling to as low as $47.23. The home-improvement retailer said warm weather helped boost fiscal-first-quarter​ profits, and it boosted full-year guidance. Home Depot earned $1.04 billion, or 68 cents a share, up from 50 cents a share a year ago and ahead of analysts' expectations for 65 cents a share. The stock was hit when sales of $17.81 billion fell short of the $17.96 billion analysts anticipated.

Avon Products (AVP) shares slumped $2.02 to $18.71. Rival Coty withdrew is $10.7 billion takeover bid late Monday. Coty said Avon had taken too long to respond to its offer. "Two months is enough," Coty chairman Bart Becht said in a letter to Avon's board.

Groupon (GRPN) shares were up 44 cents to $12.17 after reporting better-than-expected​ quarterly earnings after Monday's close. The shares had been as high as $14.92 Groupon earned 2 cents a share on revenue of $559.3 million. Analysts had forecast a profit of a penny a share on revenue of $530.6 million. The company expects second-quarter revenue to be between $550 million and $590 million. Analysts have been looking for revenue of $558.7 million. Groupon shares are up 33% since Friday.

Dick's Sporting Goods (DKS) jumped $2.81 to $50.05 after rising to as high as $51.65. The largest publicly traded U.S. athletics store boosted its full-year sales forecast.

A little good news in today's loss
It was the Dow's third loss in a row and ninth out of 11 trading days in May. The S&P 500 was also down for a third day in a row, with the Nasdaq down for a second day in a row. The the three indexes are headed toward their worst monthly performances since September. The Dow is off 4.4%, with the S&P 500 off 4.8% and the Nasdaq down 5%.

The Dow's gain for the year has been trimmed to 3.4% from a 2012 peak of 8.7% on May 1. The S&P's 2012 gain has been cut to 5.8% from a peak of 12.84% on April 2. The Nasdaq is still up 11.1% for the year; it had been up 19.9% on March 26.

But there is a little good news. The three indexes are now sporting relative strength levels below 30, which is a signal a market is oversold. You can see the RSI for the S&P 500 here. 

Dollar's rise knocks oil, gold lower
Europe's woes drove the euro lower against the dollar, and the U.S. dollar index hit 81.33, up from 80.75 on Monday. The euro was trading at $1.2729 today, its lowest level since mid-January.

Crude oil settled down 80 cents to $93.98 a barrel, its lowest settlement since Dec. 16. Brent crude was up 23 cents to $111.80 a barrel.

The national retail price of regular unleaded gasoline was unchanged at $3.727 a gallon, according to AAA's Daily Fuel Gauge Report. It was the first time in 12 days that the average did not fall. The price had fallen 27 times in 28 days and is 5.3% from its peak in early April.

Gold settled down $3.90 to $1,557.10 an ounce. Silver dropped 27.3 cents to $28.08 an ounce. Copper (-HG) was off 3.65 cents to $3.5175 a pound.

Interest rates were basically flat, although the 10-year Treasury yield slipped to 1.779% from 1.788% on Monday.

Short hits from the markets -- New York close
			Tues.			Mon.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.0900%			0.090%			0.00%			800.00%
5-year Treasury note			0.733%			0.721%			-9.62%			-11.69%
10-year Treasury note			1.777%			1.788%			-7.21%			-5.02%
30-year Treasury bond			2.931%			2.949%			-5.73%			1.45%
Currencies
U.S. Dollar Index			81.38			80.748			3.21%			1.07%
British pound			1.6000			1.6103			-1.49%			2.98%
(in U.S. $)
U.S. $ in pounds			£0.625			£0.621			1.51%			-2.89%
Euro in dollars			$1.27			$1.28			-3.91%			-1.76%
(in U.S. $)
U.S. $ in euros			€ 0.786			€ 0.779			4.07%			1.79%
U.S. $ in yen			80.39			79.86			0.48%			4.26%
U.S. $ in Chinese			6.34			6.32			0.61%			0.22%
yuan
Canada dollar			$0.994			$0.997			-1.95%			1.28%
(in U.S. $)
U.S. dollar			$1.007			$1.003			1.98%			-1.27%
(in Canadian $)
Commodities
Gold (-GC)			$1,557.10			$1,561.00			-6.44%			-0.62%
(per troy ounce)
Copper (-HG)			$3.518			$3.554			-8.15%			2.37%
(per pound)
Silver (-SI)			$28.0800			$28.3530			-9.47%			0.59%
(per troy ounce)
Wheat (-ZW)			$6.085			$5.9825			-7.03%			-6.78%
(per bushel)
Corn (-ZC)			$5.9725			$5.830			-5.83%			-7.62%
(per bushel)
Cotton			$0.7916			0.7882			-11.45%			-13.66%
(per pound)
Coffee			$1.7840			1.7795			-0.64%			-22.32%
(per pound)
Crude oil (-CL)			$93.98			$94.78			-10.38%			-4.91%
(per barrel)