Stocks Sag on Tech Earnings, Obama Stance - TheStreet

NEW YORK (

TheStreet

) -- Stocks finished sharply lower Friday, weighed down by slumping tech and financial shares and uncertainty over the Obama administration's increasingly hostile approach toward Wall Street and China's economic policy.

The

Dow Jones Industrial Average

tumbled 217 points, or 2.1%, to 10,173. The

S&P 500

shed 25 points, or 2.2%, to 1092, as the

Nasdaq

fell 60 points, or 2.7%, to 2205.

The third straight day of declines dragged the blue-chip average down to its worst weekly performance in nearly a year. The Dow plunged 4.1% since last Friday. The S&P 500 slid 3.9% for the week, as the Nasdaq dropped 3.6%.

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The tech sector waned after two bellwethers reported late Thursday.

Google

(GOOG) - Get Report

shares shed 5.7% after it

topped Street forecasts late Thursday

. The Internet search giant earned $6.79 a share in the fourth quarter on a 17% revenue surge, but failed to meet more bullish sales expectations.

Despite a narrower-than-expected loss, shares of

Advanced Micro Devices

(AMD) - Get Report

retreated by 12.4%, with one analyst noting "

some near-term weakness in desktop PCs."

As the world's No. 2 chipmaker declined, so went the rest of the sector, as the Philadelphia Semiconductor Index stumbled 5.3%. Shares of rival

Intel

(INTC) - Get Report

also went lower by 4.5%. A Citigroup analyst downgraded a group of semiconductor-equipment stocks on Friday.

Still, several analysts said lingering anxieties are putting downward pressure on stocks. On Thursday, President Obama

rocked the market after proposing a series of new curbs

on the nation's largest banks.

Stock declines accelerated Friday after the president spoke at a town hall meeting in Ohio. There, he struck a populist tone against the banking sector in reiterating "we want our money back."

Observers are also continuing to eye monetary tightening maneuvers in China.

"Lots of people were looking for a correction, and we finally got a reason," Jim Paulsen, chief investment strategist at Wells Capital Management, said about Obama's announcement on Thursday. "But, if anything, this is traders refreshing the markets.

"I'd be more concerned if this selloff was based on fundamental issues, weak earnings or discouraging economic data," Paulsen continued. "What's got more legs is the China tightening, but that's just part of a recovery."

Several major bank stocks continued their slump from Thursday, with

Bank of America

(BAC) - Get Report

,

JPMorgan Chase

(JPM) - Get Report

and

Morgan Stanley

(MS) - Get Report

sliding 3.7%, 3.4% and 5.3%, respectively.

The market appeared to shrug off two upbeat blue-chip reports. Though

General Electric's

(GE) - Get Report

profit dropped 19%, the industrial conglomerate posted fourth-quarter earnings that were 2 cents ahead of the consensus, which called for 26 cents a share. With $41.4 billion in revenue, GE also beat sales forecasts. But

NBC Universal

, which is being sold to

Comcast

(CMCSA) - Get Report

, saw a 30% profit decline. Still, shares ticked higher by 0.6% to $16.11, making it one of the Dow's leading advancers.

Fellow Dow component

McDonald's

(MCD) - Get Report

was following close behind after beating the Street view by a penny in posting $1.03 a share in profit. The hamburger chain said international operations helped lift revenue 7% to $5.97 billion. McDonald's shares were also putting a stopgap on further losses on the average by advancing 0.3%.

Both

American Express

(AXP) - Get Report

and

Capital One

(COF) - Get Report

also beat earnings forecasts late Thursday. But officials offered cautious business assessments during conference calls. Shares went lower by 8.5% and 12.1%, respectively. American Express led laggards on the Dow.

A flood of regional banks also reported in the morning.

SunTrust Banks

(STI) - Get Report

narrowed its fourth-quarter loss to 64 cents a share and topped forecasts, while also noting encouraging credit trends.

BB&T

(BBT) - Get Report

joined SunTrust in posting a profit beat, though

Huntington Bancshares

(HBAN) - Get Report

and

Webster Financial

(WBS) - Get Report

fell short of bottom-line expectations.

Though net income dropped 31%, oilfield service company

Schlumberger

(SLB) - Get Report

beat top- and bottom-line estimates

, noting encouraging demand signals for oil. But margins suffered in the quarter, and Schlumberger expressed caution about natural gas activity. Shares dipped 4.5%.

The oil service segment also weighed on the broader indices, as the Philadelphia Oil Service Sector Index fell 4%.

Shares of

Harley-Davidson

(HOG) - Get Report

plunged 7.8% after the motorcycle manufacturer posted its first quarterly loss in 16 years.

Crude oil for March delivery slid $1.54 to settle at $74.75 a barrel. The February gold contract settled at $1,089.70 an ounce after sliding $13.50.

The greenback fell against a basket of currencies with the Dollar Index lower by 0.2%.

The benchmark 10-year Treasury note improved 1/32, dragging the yield lower to 3.594%.

The Bureau of Labor Statistics released December's state-by-state unemployment figures on Friday. Though the national unemployment rate stayed steady at 10%, 43 states, along with the District of Columbia, watched their jobless rates edge higher.

Toyota

(TM) - Get Report

shed 2.5% after saying late Thursday it would recall some 2.3 million U.S. vehicles because of

"sticking accelerator pedals."

Overseas, Hong Kong's Hang Seng declined 0.7%, and Japan's Nikkei slipped 2.6%. The FTSE in London lost 0.6%, while the DAX in Frankfurt declined 0.9%.

Elsewhere, Sen. Russ Feingold (D., Wis.) and Sen. Barbara Boxer (D., Calif.) joined a growing chorus of those voicing opposition to the reconfirmation of

Federal Reserve

Chairman Ben Bernanke today.

Rep. Barney Frank (D., Mass.), chairman of the House Financial Services Committee, said his committee will recommend the elimination of

Fannie Mae

(FNM)

and

Freddie Mac

(FRE)

. The chairman instead called for an entirely new approach to home financing.

--Written by Sung Moss in New York