Stocks tumbled Friday morning as disappointment about General Electric and Bank of America's financial results gave investors a reason to retreat after pushing the Dow to a one-year high in the previous session.
The Dow Jones industrial average (INDU) fell 112 points, or 1.1%, around 40 minutes into the session. The S&P 500 (SPX) index shed 14 points, or 1.3%, and the Nasdaq composite (COMP) dropped 28 points, or 1.3%.
The Dow ended Thursday's session at the highest point since Oct. 3, 2008, as higher oil prices propelled energy shares.
The stock market has essentially been on a tear since bottoming in March, with repeated calls for a big 10% to 15% selloff going unmet. Since hitting a more than 12-year low on March 9, the S&P 500 has gained 62% as of Thursday's close.
Company results: Bank of America (BAC, Fortune 500) reported a third-quarter loss of 26 cents per share, which was worse than the loss of 21 cents per share projected by a Thomson Reuters consensus of analysts.
Bank of America also fell behind expectations on revenue, reporting $26 billion for the third quarter, compared to the Thomson Reuters forecast of $27.6 billion. BofA shares fell almost 5%.
General Electric (GE, Fortune 500) reported earnings of 28 cents per share, which was higher than expected, and revenue of $37.8 billion, which was lower than forecast.
Analysts had expected GE to report third-quarter EPS of 20 cents and revenue of $39.5 billion. Investors were disappointed as most of the profit gains came from cost-cutting efforts. GE's stock slipped 5% in morning trading.
Google (GOOG, Fortune 500) reported results late Thursday that surpassed Wall Street's estimates and said that the worst of the recession is over. Shares gained 3% Friday.
Tech bellwether IBM (IBM, Fortune 500) also posted better-than-expected earnings Thursday. But shares tumbled Friday as investors expressed disappointment with its lower revenue.
World markets: Global markets were mixed. In Europe, London's FTSE 100 fell 0.3%, France's CAC 40 fell 0.9% and Germany's DAX lost 0.8%. Asian markets ended mixed, with the Hong Kong Hang Seng lower and the Japanese Nikkei lower.
Bonds: Treasury prices rose, lowering the yield on the 10-year note to 3.46% from 3.42% late Wednesday. Treasury prices and yields move in opposite directions.
Currency and commodities: The dollar gained versus the euro and the yen, turning positive after its recent across-the-board weakness versus a basket of currencies.
U.S. light crude oil for November delivery fell 19 cents to $77.39 a barrel on the New York Mercantile Exchange, after ending the previous session at the highest level in a year.
COMEX gold for December delivery fell $2.80 to $1,047.80 an ounce. Gold hit record highs repeatedly over the last week in response to a weak U.S. dollar and ongoing concerns about inflationary pressures.
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