Stocks fall after disappointing earnings news on 25th anniversary of Black Monday
By Bloomberg | October 19, 2012 4:21 pm
Stocks slid Friday, with the S&P 500 seeing its largest decline on a closing basis since June 25, as companies from General Electric to McDonald's and Microsoft posted results below estimates and eurozone leaders failed to discuss aid for Spain at a summit.
The Dow Jones industrial average closed down 205.43, or 1.52%, at 13,343.51; the S&P 500 fell 24.15, or 1.66%, ending at 1,433.19; and the Nasdaq composite closed down 67.25, or 2.19%, at 3,005.62. All numbers are preliminary.
GE, McDonald's and Microsoft lost more than 2.8%. The STOXX Europe 600 declined 0.8%, paring its advance this week to 1.7%.
Friday's decline came on the 25th anniversary of the worst one-day crash in U.S. history. The 23% plunge in the Dow Jones industrial average on Oct. 19, 1987, came amid signs of a slowing economy, the threat of higher taxes and concern among individuals that trading was rigged for insiders.
GE posted quarterly sales of $36.3 billion, missing the average analyst estimate for revenue of $36.9 billion as foreign-exchange moves hurt sales by $1.1 billion. McDonald's reported third-quarter profit fell 3.5% as sales growth slowed at U.S. stores. Microsoft reported fiscal first-quarter profit and sales late Thursday that missed estimates as sales of its Windows operating system declined.
Per-share profits have exceeded analysts' estimates at about 69% of the 116 companies in the S&P 500 that released results so far, according to data compiled by Bloomberg. Earnings have increased less than 0.1% for the group on a 1.8% gain in sales.
Reports on Friday showed sales of previously owned U.S. homes decreased 1.7% to a 4.75 million annual rate.
An EU summit failed to discuss further financial assistance for Spain, according to French President Francois Hollande. Germany and France agreed to enforce common banking regulation for the eurozone's 6,000 lenders by the end of next year.