Stocks reduced losses late in the session but still finished lower on Friday, ending a terrible month that saw the Dow industrials suffer their worst May in 70 years, after a downgrade of Spain's debt rating reminded investors that Europe's economic problems will continue. Stocks already were weak before the ratings agency cut Spain's debt by one level. While the cut still leaves the debt in investment-grade territory, it still unnerved investors in a lightly traded session ahead of a holiday weekend. All U.S. markets are closed Monday for Memorial Day. Friday was the end of a difficult month on Wall Street in which stocks plunged on concerns about the European debt crisis, the weak euro currency, and bets the recent market advance had overtaken actual economic improvement. The Dow lost 7.9 percent, its worst month since February 2009, and its worst May since 1940. The Standard & Poor's 500 index fell 8.2 percent, its worst month since February 2009 and its worst May since 1962. The Nasdaq declined 8.3 percent, its worst month since February 2009 and its worst May since 1940. In U.S. economic news, personal income rose 0.4 percent in April, matching March's increase. Personal spending was unexpectedly flat. A second report showed consumer sentiment rose slightly in May from the previous month, but was at the same level seen since February. The U.S. dollar gained 0.5 percent versus the euro and fell 0.3 percent versus the yen. Light sweet crude oil for July delivery fell $1.08 to $73.3 a barrel on the New York Mercantile Exchange. Gold for August delivery fell $4.40 to $1,210 an ounce. The Dow Jones industrial average fell 122.36, or 1.2 percent, to 10,136.63. Twenty-seven of the index's 30 components fell, led by Caterpillar, Exxon Mobil, Chevron, 3M, Johnson & Johnson, IBM, and Hewlett-Packard. The broader S&P 500 index fell 13.65, or 1.2 percent, to 1,089.41. The technology-heavy Nasdaq composite index fell 20.64, or 0.9 percent, to 2,257.04.
