Stocks fell sharply Friday after a series of depressing economic and earnings reports and high oil prices stoked concerns about the health...
NEW YORK — Stocks fell sharply Friday after a series of depressing economic and earnings reports and high oil prices stoked concerns about the health of the economy.
The Dow Jones industrial average slid 315.79, or 2.5 percent, to close the week at 12,266.39.
Microsoft, one of the 30 Dow stocks, fell 73 cents to close at $27.20 a share. Boeing, also a Dow stock, sank $2.01 to $82.79.
Broader stock indicators also tumbled. The Standard & Poor’s 500 index lost 37.05, or 2.7 percent, to 1,330.63, and the Nasdaq composite index slid 60.09, or 2.6 percent, to 2,271.48.
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Investors were unnerved by disappointing quarterly results from American International Group (AIG) and Dell. Several economic reports including the Chicago purchasing managers index — which Wall Street regards as a good indicator — had their weakest showing in more than six years. A report on flat consumer spending, the rising price of oil and the eroding dollar continued to raise concerns about a possible recession.
The Commerce Department said Friday that spending posted a 0.4 percent rise in January, with all of that gain coming from a surge in inflation during the month.
Oil prices jumped to a record of $103.05 in early electronic trading before settling down 75 cents at $101.84 a barrel on New York Mercantile Exchange. The fall in the dollar has sent prices of commodities such as oil and gold soaring.
The euro flew past its previous high against the dollar to hit $1.5238 before subsiding to $1.5194 late in New York trading. The euro topped $1.50 this week for the first time since being introduced in 1999 at $1.17.
Meanwhile, another survey indicated that consumer confidence took a big drop last month. The Reuters/University of Michigan final reading on consumer sentiment fell to the lowest final monthly reading in 16 years and down sharply from January.
While stocks made sharp gains in the first three days this week even amid somewhat lackluster economic readings, the litany of concerns investors succumbed to Friday reflected the undercurrent of uncertainty that has kept Wall Street on edge for months.
“We really had to face a plethora of negative news,” said Art Hogan, chief market strategist at Jefferies & Co. in Boston. “We just ran out of gas this week.”
Hogan said while stocks held up admirably early in the week amid an uneven flow of economic news, they couldn’t hold their gains after the latest round of weak economic signals.
For the week, the Dow lost nearly 1 percent, while the S&P 500 gave up 1.7 percent and the Nasdaq fell 2.6 percent. The week’s losses would have been steeper had stocks not risen early in the week on hopes many of Wall Street’s credit troubles were easing and after IBM announced a sizable stock-repurchase plan on Thursday.
Friday’s losses sent stocks lower for February, the fourth straight month of declines.
Insurer AIG announced a $5.29 billion quarterly loss largely because of steep declines in the value of a portfolio of contracts known as credit default swaps. Such contracts pledge to cover missed payments on debt. The firm’s losses caught analysts off guard, as many had expected it to turn a profit.
While each of the 30 stocks that comprise the Dow industrials showed declines, those of AIG were the steepest. The stock fell $3.29, or 6.6 percent, to $46.86.
Computer-maker Dell posted a 6 percent decline in its quarterly profit, falling below analysts’ expectations, and warned that its business could suffer from reduced customer spending. Dell slid 97 cents, or 4.7 percent, to $19.90.
Bill Schultz, chief investment officer at McQueen, Ball & Associates in Bethlehem, Pa., said AIG’s report left investors uneasy about the prospect of further sizable write-downs of bad debt.
“Every time we get to a point where we think we’ve finished, another report comes out and says we’re not done yet,” he said.
Schultz expects Wall Street will continue to proceed with “fits and starts” until investors sense that the bad debt from faltering mortgages has been accounted for and that balance sheets are on the mend.
Associated Press reporters Matt Moore, Stephenson Jacobs and Martin Crutsinger contributed
to this article.