U.S. stocks dropped sharply on Friday after quarterly results from General Electric Co
GE's weaker-than-expected revenue and Bank of America's $1 billion loss reflected how U.S. businesses and consumers continue to struggle with their debts, sending major indexes down more than 1 percent. The results were a sharp contrast to results from JPMorgan Chase & Co
Friday's results poured some cold water on investor optimism and spurred profit-taking after a strong run that saw major indexes hit new yearly highs and pushed the Dow industrials above 10,000 on Wednesday.
The disappointing results from Bank of America and GE do not mean the whole earnings season will go sour, but it is raising a question mark among investors, said Peter Cardillo, chief market economist at Avalon Partners in New York.
The Dow Jones industrial average <.DJI> was down 106.48 points, or 1.06 percent, at 9,956.46. The Standard & Poor's 500 Index <.SPX> was down 13.11 points, or 1.20 percent, at 1,083.45. The Nasdaq Composite Index <.IXIC> was down 28.07 points, or 1.29 percent, at 2,145.22.
Bank of America's shares fell 4.4 percent to $17.31, and GE dropped 5.5 percent to $15.86.
Adding to the gloom, U.S. consumer confidence fell unexpectedly this month on concerns over the state of personal finances. The news overshadowed an earlier report on surprisingly strong industrial production in September, up for the third consecutive month.
Investors are having a logical debate right now, which is, What is the recovery going to look like and what is its effect on corporate profits? said Bruce Zaro, chief technical strategist at Delta Global Advisors in Boston.
The U.S. dollar, which has traded inversely to stocks on its attraction as a safe-haven investment, edged up 0.2 percent against a basket of currencies <.DXY>. That and demand concerns weighed on commodity prices, including oil, sending energy and commodities shares down.
International Business Machines Corp
(Editing by Leslie Adler)