Facebook rebounds but US stocks fall on dull data

NEW YORK, May 31, 2012 (AFP)
Stumbling Facebook shares got a shot of adrenalin Thursday and pushed five percent higher as US stocks traded lower Thursday on dull jobs and economic growth data.

Even as the markets remained under a cloud of sluggish growth and eurozone troubles, Facebook rebounded from an early 4.5 percent loss to finish the day with a solid $1.41 gain to $29.60.

Stocks overall closed with modest losses.

The Dow Jones Industrial Average shed 26.41 points, or 0.21 percent, to finish at 12,393.45.

The broad-based S&P 500 lost 2.99 points (0.23 percent) to 1,310.33, while the tech-rich Nasdaq slipped 10.02 (0.35 percent) to 2,827.34.

"The major averages are down for a second day amid disappointment over this morning's economic data," said Wells Fargo Advisors.

Sellers took their cue from the government's lowered estimate for first-quarter economic growth, to 1.9 percent from 2.2 percent, confirming the sluggish pace and raising questions over how much of a rebound could be expected in the current quarter.

Meanwhile two jobs reports -- weekly unemployment claims and private-sector job creation in May -- both were disappointing, pointing to slow improvement in the economy.

Facebook, still far below its May 18 IPO share price of $38, took another fall early in the day to hit $26.83. But buyers moved in late in the session and sent the price soaring to end 5.0 percent higher.

Bank of America led gainers in the Dow blue chips group with a 2.1 percent gain, followed by Disney which added 1.1 percent.

Caterpillar topped the losers, falling 2.8 percent after hopes for a Chinese stimulus program were dashed amid denials in official reports.

On the Nasdaq, disc drive maker Seagate fell 3.7 percent and rival Western Digital was off 2.6 percent after both received downgrades from Barclays Capital.

Euro-worries sent bond prices higher. The yield on the 10-year Treasury bond dropped to 1.58 percent from 1.63 percent Wednesday, an all-time low, while the 30-year fell to 2.67 percent from 2.72 percent.

Bond prices and yields move in opposite directions.