The Dow Jones industrial average fell 86 points, or 0.7 percent, to 12,519.01 in morning trading.
The Standard Poor’s 500-stock index fell 9.48, or 0.7 percent, to 1,334.12. The Nasdaq composite fell 22.68, or 0.8 percent, to 2,800.63.
Oil prices fell $1.90 to $96.54 a barrel, sending energy companies lower. Energy companies in the S. P. 500 fell 1 percent.
Crude has been bouncing around the upper-$90s for most of the week as the dollar fluctuated and reports on demand for oil came in mixed.
Gap Inc. plunged 17 percent Friday morning after reporting late Thursday that the cost of raw materials rose faster than expected and hurt its quarterly profit. The national clothing chain also cut its forecast for what it would earn in the full year.
Gap’s sales have been sluggish, a worrying sign for investors who are counting on shoppers to lead a recovery in consumer spending. Gap’s results pushed down other clothing companies who have been hit hard by the rising price of cotton and shoppers who are reluctant to splurge. The five worst-performing stocks in the S. P. 500 Friday were retailers. Urban Outfitters fell 5 percent. Ralph Lauren, Limited Brands and VF Corporation also fell.
One exception to the gloom among retailers was Barnes Noble. The bookseller jumped 30 percent in early trading after Liberty Media offered to buy the company for $1 billion in cash.
Even as most energy stocks fell, Anadarko Petroleum jumped 4 percent on hopes that the company would owe less than expected to the oil giant BP for its part in the Deepwater Horizon disaster.
BP said it would receive a $1 billion payment from Moex, which owned a 10 percent stake in the Macondo oil well in the Gulf of Mexico. The settlement was for a smaller amount than Moex investors feared, and suggested that Anadarko, which owned 25 percent of the well, would also pay less to BP.
BP’s stock rose 3 percent on expectations that other companies will share costs related to the Gulf of Mexico oil spill.
The software company Salesforce.com rose 9 percent, the most of any stock in the S. P. 500, after its first-quarter profit beat Wall Street expectations.
On Thursday, a stable listing of the commodities giant Glencore and a doubling in the share price of LinkedIn helped shore up confidence.
“Whether these events actually mark a turning point in what has been a rather benign period for new listings remains to be seen although after such an absence and generally poor yields on holding cash, it can be of little surprise that the appetite was there to start with,” said Chris Weston, an institutional trader at IG Markets.
In Europe, shares moved lower late in the session. The FTSE 100 index of leading British shares was down 0.3 percent, while Germany’s DAX was down 1.4 percent. The CAC 40 in France was down 0.9 percent.
The euro was weighed down by seeming disagreements about what to do about Greece’s debt crisis as well as another downgrade of the country’s debt rating from Fitch.
“The rating downgrade reflects the scale of the challenge facing Greece in implementing a radical fiscal and structural reform program necessary to secure solvency of the state and the foundations for sustained economic recovery,” Fitch said.
By mid-afternoon London time, the euro was 1.2 percent lower at $1.4148.
In its first day of trading, LinkedIn’s value more than doubled Thursday within minutes of its initial stock offering, making it the biggest since Google in 2004.
The stock, issued at $45, went as high as $122.70 just before noon and closed at $94.25 on a trading volume of 30 million shares. Wall Street skeptics warned that the LinkedIn offering could signal a bubble reminiscent of the late 1990s, when euphoric investors bid up the price of Internet companies that would later fail. Others were encouraged that blockbuster public offerings were making a comeback.
In morning trading Friday, LinkedIn moved back above $100, gaining more than 7 percent.
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