Financial Worries Drub Wall Street

Last time out, the major indices slid after traders received a sluggish gross domestic product and a worse-than-expected jobless claims report, while Fed Chairman Ben Bernanke said some smaller banks might be lost entirely in the undertow of the housing market.

By the end of the day, the Dow fell 112.59 points to 12,581.69, the S&P shed 12.38 points to 1367.64, and the Nasdaq dropped 22.21 points at 2331.57. All three were down about 0.9%.

Following the prior close, Dell (DELL Quote) reported that its fourth-quarter profit declined 6% year over year, but revenue didn't rise enough to meet expectations. Shares lost 4.7% to $19.90.

In other earnings reports, software company Novell (NOVL Quote) surpassed Wall Street projections and beefed up its full-year guidance. Shares jumped 13.9%.

Gap (GPS Quote) said its profit rose 21% despite lower sales, and the clothing retailer also authorized $1 billion for a stock buyback. Shares rose 3.7%.

Among other equity news, 3Com (COMS Quote) soared after The Wall Street Journal reported that Bain Capital and China-based Huawei will take another stab at garnering approval for their proposed $2.2 billion buyout of the networking company. 3Com shares closed up 13.1% to $3.29.

Automaker General Motors (GM Quote), a member of the Dow, shed 5% on word it will halt operations at three more of its plants, owing to a strike against supplier American Axle & Manufacturing (AXL Quote), according to reports.

In commodities, crude oil hit another milestone, traversing $103 a barrel for the first time, but it closed off 75 cents to $101.84. Gold futures added $6.50 to $967.50 an ounce.

Overseas, the major markets mostly took steep losses following the U.S. plunge on Thursday. In Asia, Tokyo's Nikkei 225 was hit particularly hard after the Japanese government reported that its core consumer price index, a key inflation metric, had its biggest rise in 10 years. The Nikkei lost 2.3% to 13,603, and Hong Kong's Hang Seng gave up 1.1% to 24,332.

As for European bourses, London's FTSE 100 was down 1.4% to 5884, and Germany's Xetra Dax slid 1.7% at 6748.