Stocks fall despite Blackstone debut

NEW YORK CNNMoney.com) -- Stocks fell Friday as the biggest public offering in five years failed to excite investors still nervous over rising bond yields.

The Dow Jones industrial average (down 77.71 to 13,468.13, Charts) fell about 0.4 percent nearly an hour into the session. The broader S&P 500 (down 7.41 to 1,514.78, Charts) slipped 0.5 percent while the tech-laden Nasdaq (down 11.28 to 2,605.68, Charts) lost about 0.5 percent.

After a brief delay at the open, private equity firm weight Blackstone debuted on the New York Stock Exchange at about $36.45 a share, an 18 percent premium over the $31 a share the firm sold underwriters Thursday.

But thee IPO action didn't do much for the broader market, which is still reeling from nervousness about rising interest rates.

Treasury prices fell yet again Friday, raising the yield on the 10-year note to 5.20 percent. Bond prices and yields move in opposite directions.

Bond yields have jumped in recent weeks as investors worried about rising rates and inflation worldwide, especially in red hot economies like China.

Investors have worried that rising rates could further damage the already battered housing market and crimp consumer spending. On top of that, higher rates could slow corporate borrowing, which has fueled much of the recent merger and buyout activity that's helped lift stocks this year.

The potential closure of two Bear Stearns hedge funds hit by big losses in securities backed by subprime mortgages hasn't helped stocks either, and the Dow is down about 100 points for the week.

In corporate news, BP (Charts), facing pressure from the Kremlin, is close to a deal that would give up its holdings in a $20 billion Russian natural-gas project to state-controlled gas monopoly Gazprom, according to a report in the Wall Street Journal.

European shares were trading mixed. Markets in Asia ended mostly lower, although Hong Kong shares rallied. The dollar fell against the euro but rose versus the yen in early trading.

Oil prices rose as talks failed between the Nigerian government and labor union officials aimed at ending a general strike in Africa's largest oil exporter. U.S. light crude gained 26 cents to $68.92 a barrel.