Stocks finished in the red, ending a month on a weak note. The Dow and S&P 500 dropped more than 6%, the Nasdaq has declined 7% in May. Worries about Spain not being able to fund bank bailouts, which could reach a cost of as much as €100 billion, continue to build. The IMF said it will begin its annual economic review of Spain next Monday. Also, U.S. GDP growth for the first quarter was revised lower to a 1.9% annual rate, slower than the 2.2% rate first estimated. ADP private-sector payrolls showed a gain of 133,000 jobs, less than the 157,000 forecast by economists. Additionally, weekly initial jobless claims rose 10,000 to 383,000, higher than the expected 368,000 forecast. The Chicago PMI, fell for a third straight month to 52.7, the lowest level since May 2009. The index was expected to come in at 57 for May, up from 56.2 in the month prior. The tech sector slipped into the red, while Facebook recovered from early losses to close 5% higher. Intel slipped 1% after Morgan Stanley initiated coverage of the stock with an underweight rating, citing slower growth and potential margin erosion. Meanwhile, Zynga rose 7% after Baird Equity Research upgraded the stock to outperform from neutral, saying “headwinds appear largely priced in. Implied volatility inched higher on moderate trading volumes.
