NEW YORK (TheStreet) -- The major U.S. stock averages plunged Friday with investors spooked by a batch of high-profile earnings misses and the re-emergence of eurozone jitters.
Adding to the drama of the session, the drop came on the
Soft results from
this morning on the heels of shortfalls from tech bellwethers
on Thursday stoked concerns about the potential for an even weaker performance in the fourth quarter.
Dow Jones Industrial Average
sank more than 205 points, or 1.52%, to close at 13,343.51. The blue-chip index was able to hold onto a slim 0.11% gain for the week and is up 9.2% in 2012.
Twenty-nine of 30 components closed lower. The biggest blue-chip decliners were
, GE, McDonald's, and Microsoft. Only
managed to gain ground.
General Electric posted in-line third-quarter earnings of 36 cents a share, but revenue came in at $36.35 billion, falling short of analysts' expectations of $36.94 billion. The stock closed down 3.4% on the day.
Shares of McDonald's finished with a 4.4% loss after the fast food giant posted a quarterly profit of $1.43 a share, below the consensus view for a profit of $1.47 a share, as the stronger dollar weighed on results abroad and the fast-food giant faced stiffer domestic competition.
Microsoft's stock lost 2.9% after the software giant reported a year-over-year decline in operating income for its fiscal first quarter, citing slow PC demand ahead of its Windows 8 launch. After losing 8% on Thursday after its below-consensus earnings leaked early, Google shares were down another 1.9% on Friday.
Investors were also assessing the scant developments that emerged from the second day of meetings between European Union leaders in Brussels, where issues surrounding more financial aid for Spain weren't addressed.
Although they were in agreement of having a legal framework for a single euro banking supervisor formed by year end, the leaders did not lay out a clear start date.
"In a celebrated instance of kicking the can down the road, the EU summit appears to have delayed any difficult decisions on the euro banking union until next year," Paul Donovan, global economist at UBS, commented. "A 'legal framework' is reportedly agreed, but the obstacles to overcome are more political than legal."
The U.S. economic data was in-line with expectations as the National Association of Realtors said existing home sales fell 1.7% in September to a seasonally adjusted annual rate of 4.75 million in September. That's up 11% from the 4.28 million-unit pace seen in September 2011.
Total housing inventory at the end September fell 3.3% to 2.32 million existing homes available for sale, which represents a 5.9-month supply at the current sales pace, down from a 6-month supply in August.
"Despite occasional month-to-month setbacks, we're experiencing a genuine recovery," said Lawrence Yun, the chief economist at NAR.
decreased 24 points, or 1.66%, to settle at 1433, but added 0.32% for the week. The
saw the deepest decline, falling more than 67 points, or 2.19%, to close at 3006. The tech-heavy index lost 1.26% for the week.
The S&P 500 remains up just shy of 14% year-to-date, while the Nasdaq holds a gain of 15.37%.
Every sector was in the red with conglomerates, technology and basic materials suffering the steepest losses.
Decliners outpaced advancers by a 3.4-to-1 ratio on the New York Stock Exchange and a 4.2-to-1 ratio on the Nasdaq. Volume totaled 3.87 billion on the Big Board and 2.22 billion on the Nasdaq.
"Between now and year end, we see largely range-bound equity markets and higher volatility," said Jordan Waxman, managing director at Hightower. "The backdrop is that on the one hand, the environment for stock investing is benign, as interest rates and inflation are low, corporate profits are healthy and valuations are not stretched. However, earnings growth is decelerating -- some of which is not yet forecasted by the analyst community -- and there is still plenty of slack in labor and housing, uncertainty over the fiscal picture in the U.S. and over the health of sovereigns abroad."
The FTSE 100 in London closed down 0.35% and the DAX in Germany fell 0.76%. The Nikkei Average in Tokyo finished up 0.22% and the Hong Kong Hang Seng closed up 0.15%.
December crude oil futures fell $2.05 to close at $90.05 a barrel. December gold futures plunged $20.70 to settle at $1,724 an ounce.
The benchmark 10-year Treasury rose 19/32, diluting the yield to 1.771%. The greenback was up 0.36%, according to the
In other corporate news,
shares slumped 8.4% after the business services company reported third-quarter earnings and revenue that missed forecasts. Jefferies cut the stock to underperform from hold.
Chipotle Mexican Grill
, the restaurant operator, reported Thursday below-consensus third-quarter results and said it sees flat to low single-digit same-store sales in 2013. Shares lost15%.
Advanced Micro Devices
reported a deep third-quarter loss on Thursday, said it plans to cut 15% of its work force, and forecast a sequential decrease in revenue of 9% or so for the fourth quarter. The stock gave back nearly 17%.
Oilfield services company
reported below-consensus earnings and sales. Shares shed 5%.
gained 1.7% after the diversified technology and manufacturing company beat on the bottom line and missed on the top line.
2012 Stock Predictions and Outlook
--Written by Andrea Tse and Joe Deaux in New York.
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