Stocks tumbled on Friday after consumer sentiment hit nearly a one-year low and GE and two major U.S. banks reported disappointing quarterly revenue.
Weak energy costs pushed consumer prices down for a third straight month in June, U.S. government data showed. That report and the Thomson Reuters/University of Michigan data were the latest in a string of economic indicators showing the pace of the recovery is slowing.
The S&P 500's slide of more than 2 percent was a decisive break for the index that had climbed in seven of the past eight sessions.
You're seeing increasing evidence this is not going to be a robust recovery, said Eric Kuby, chief investment officer of North Star Investment Management Corp in Chicago.
In particular, that's dampening the possibility that the retail investor might get back into the market, which we really haven't seen.
General Electric Co , Bank of America Corp and Citigroup Inc joined the list of major companies that beat Wall Street's expectations, but investors unloaded some shares of all three after the companies reported a drop in quarterly revenues.
Bank of America slid almost 9 percent and the S&P financial index <.GSPF> dropped 3.9 percent as investors fretted about how banks will make money going forward.
The Dow Jones industrial average <.DJI> dropped 237.88 points, or 2.30 percent, to 10,121.43. The Standard & Poor's 500 Index <.SPX> slid 28.88 points, or 2.63 percent, to 1,067.60. The Nasdaq Composite Index <.IXIC> gave up 61.93 points, or 2.75 percent, at 2,187.15.
GE's stock fell 4.2 percent to $14.61, while Citigroup lost 5.1 percent to $3.95.
Bank of America was down 8.8 percent at $14.03.
Google Inc shares also sagged after the company missed profit expectations for the first time in two years. The stock was down 6.5 percent at $462.04.
The Thomson Reuters/University of Michigan survey of consumers showed U.S. consumer sentiment fell far more than expected to 66.5 in a preliminary July reading, down sharply from 76.0, June's final number. Earlier, the U.S. Labor Department reported the U.S. Consumer Price Index dipped 0.1 percent in June, which was weaker than the forecast for no change.
The S&P's consumer discretionary sector was among the biggest losers; the sector's index <.GSPD> fell 3.3 percent.
(Editing by Jan Paschal)