GE Cuts Dividend, Markets Fall Into Weekend

Updated from 4:14 p.m. EST

Stocks in New York sealed an awful February with modest losses on a no-good, very-bad-news day, on which GE cut its dividend, and the U.S. government took a greater stake in Citi and reported a surprisingly bad GDP reading for the end of 2008.

Marred by battered financials and aching healthcare, the Dow Jones Industrial Average fell 119.15 points, or 1.7%, to 7062.93, and the S&P 500 gave up 17.74 points, or 2.4%, to 735.09, cutting below its Nov. 20 intraday low of 747.78. After flirting with positive territory throughout the day, the Nasdaq sank 13.63, or 0.1%, to 1377.84.

For the week, the Dow gave up 4.1%, the S&P lost 4.5%, and the Nasdaq gave up 4.4%. For the month of February, they were lessened by 11.7%, 11%, and 6.7%, respectively. Year-to-date, the Dow is off by 19.5%, the S&P has lost 18.6%, and the Nasdaq has shed 12.6%.

Leading Friday afternoon headlines, General Electric (GE) said it will cut its dividend from 31 cents to 10 cents a share. The move, unconfirmed by GE, was not entirely unexpected, as company comments that it would "evaluate" the dividend had left investors speculating. Shares lost 6.5% to $8.51.

With shareholders fretting over potential government dilution of Citi(C) shares, the bank led the Dow's decliners, losing 39% to $1.50, with Bank of America(BAC) registering a 25.8% drop itself to $3.95. The KBW banking index gave up 8.7% Friday.

"With the Dow below 7,100, from a technical perspective, it looks like 6300 is the next price point," says Anu Sharma, managing director of the market intelligence desk at Nasdaq OMX. "We saw short-interest jump up last month, and I wouldn't be surprised to see it again this month; If you're a long investor, you continue to stay away from the market right now.