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 - Get Report) 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 - Get Report) shares, the bank led the Dow's decliners, losing 39% to $1.50, with Bank of America ( BAC - Get Report) 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.

But, Marc Pado, U.S. market strategist for Cantor Fitzgerald, believes there is something keeping the shorts at least somewhat at bay. Specifically, Treasury Secretary Tim Geithner has promised to deliver more details on the bank bailout plan in a several-week period that's now winding down. The missing piece, says Pado, is how the government is going to price the bad assets that it will take off banks' hands.

Pado points out that the previous two times the market anticipated this information from Geithner, the market rallied -- of course, only to tank when it was clear those details weren't being released. "Once that information is put aside, the market could move higher," he says.

Chipping away at market optimists, a Commerce Department report on Friday showed the U.S. economy contracted at a whopping 6.2% annualized pace at the end of 2008, the worst figure in a quarter-century, as the country sinks deeper into recession.

The economy shriveled faster than the government's first estimate, which predicted a 3.8% decline. It was also noticeably worse than the 5.4% annualized decline economists expected.

The other big news Friday morning was the aforementioned Citigroup ( C - Get Report) said it reached a deal with the U.S. government in which it will convert $25 billion of the $45 billion in emergency bailout money that it has already pledged to Citi from preferred shares into common shares in return for a 36% stake in the bank.

The government also gave Citigroup the opportunity to seek additional government funding or for the conversion to common shares of the remaining $20 billion in federal bailout money it received late last year.

In other banking news, San Francisco-based Wells Fargo ( WFC - Get Report) suspended bonus payments to five top executives, including CEO John Stumpf, because performance goals were not met in 2008.

The Blackstone Group ( BX - Get Report) also said its chairman and CEO Steve Schwartzman won't receive a bonus for 2008, following the lead of other banks like Goldman Sachs ( GS), Morgan Stanley ( MS) and JP Morgan Chase ( JPM).

The firm, which lost $827 million in the fourth quarter, also announced it would not pay a dividend to investors in its "units."

Wells Fargo & Co. lost 16% to $12.10, while Blackstone surged 25.8% to $4.87.

Taking a quick look at tech, a Japanese mobile-phone operator has stopped selling Research in Motion's ( RIMM) Blackberry Bold because of overheating problems during battery charging. Research in Motion's shares tacked on 1% nonetheless.

Sony ( SNE - Get Report) was also up 1.9% at 16.56 at the end of Friday's session after it put the reins in the hands of the Chief Executive Howard Stringer, a Welsh-born American and the first foreigner to head Sony Corp. Stringer will take on the role of president with the task of reorganizing the electronics and game businesses as they struggle with dragging sales and the economic downturn.

A bit of good news, in the auto sector no less, Ford ( F - Get Report) said Friday it will resume production at its Cleveland Engine Plant No. 1, which has been idle since 2007, to build the company's new fuel-efficient EcoBoost engines. Shares were higher by 1% at $2.

Investors largely overlooked a trio of worse-than-expected economic data early Thursday, but indicators continued to stroll in Friday. The Chicago purchasing managers index for February ticked up to 34.2, from 33, while the University of Michigan consumer sentiment index for the month came in at 56.3, roughly in line with preliminary estimates and down from 61.2 in January. Both were near to expectations.

The Economic Cycle Research Institute's weekly leading index was negative 24.1%, nearly unchanged from a week prior.

In commodities, oil fell $1.18 to settle at $44.04. Longer-dated Treasuries, though, were on the uptick; the 10-year note was rising 11/32 to yield 3%, the 30-year was higher by 13.5/32, yielding 3.7%. Gold, which stretched above $1000 an ounce earlier in the week, settled at $942.50. The dollar was slightly weaker against the pound and yen, and stronger vs. the euro.

Stocks abroad were lower. The FTSE in London and the DAX in Frankfurt lost 2.2% and 2.5%, respectively, after Japan's Nikkei and Hong Kong's Hang Seng ended with losses.