Stocks Opened Lower on Reports on Euro Zone Cuts

Stock opened lower on Friday after reports that Standard & Poor’s could downgrade the credit rating of several euro zone members as early as Friday. The Dow Jones Industrial Average lately fell 89.00 points to 12,382.02. The S&P 500 lost 8.94 points to 1,286.56. The Nasdaq Composite Index declined 12.58 points to 2,712.12.

In Europe, several euro zone countries could face “imminent” downgrade by credit rating agency Standard & Poor’s, according to a senior euro zone government source.

The trade deficit widened in November to its largest in five months, suggesting imports weighed on economic growth a bit more than expected during the fourth quarter. The trade gap totaled $47.8 billion, exceeding analysts’ forecast of a $45.0 billion deficit, Commerce Department data showed on Friday.

China’s foreign reserves showed a rare decline in the final quarter of 2011 but still were by far the world’s biggest at nearly $3.2 trillion. The reserves were $3.181 trillion as of Dec. 31, down about $20.6 billion from the end of the previous quarter in September, the central bank reported Friday.

Novartis AG plans to axe nearly 2,000 of its U.S. workforce ahead of the patent loss of top-selling blood pressure drug Diovan there and will take a $900 million charge after another of its key drugs failed to live up to expectations.

Italy’s three-year debt costs fell below 5 percent but its first bond sale of the year failed to match the success of a Spanish auction the previous day, reflecting the heavy refinancing load Rome faces over the next three months. Italy raised the maximum planned amount of 4.75 billion euros at the auction but did not live up to market expectations raised by a Spanish tender on Thursday where Madrid raised 10 billion euros, twice the planned amount, at lower rates.

Dutch financial services group ING (Amsterdam:ING.AS – News) cut a target for its bank unit and said another would take longer to achieve than expected due to bank taxes and higher capital requirements, which could also delay the repayment of remaining state aid it owes.