Stocks slid Friday, wiping out a week's worth of gains as a gauge of consumer confidence slid to an 11-month low and revenue at Bank of America, Citigroup and General Electric fell short of analyst estimates.
The Dow Jones industrial average closed down 261.41, or 2.52%, at 10,097.90; the S&P 500 fell 31.61, or 2.88%, ending at 1,064.87; and the Nasdaq composite closed down 70.03, or 3.11%, at 2,197.05. All numbers are preliminary.
The Thomson Reuters/University of Michigan preliminary index of consumer sentiment in July decreased to 66.5, the lowest since August and less than the most pessimistic forecast of economists surveyed by Bloomberg News. Another report showed inflation cooled last month.
The sentiment figures showed a record-low share of Americans expected their incomes will rise in the next 12 months, underscoring growing pessimism over employment prospects.
The S&P 500 had climbed 7.2% from July 2 through Thursday amid optimism that corporate earnings would signal the economic recovery is sustainable. S&P 500 companies are projected to increase profits by 34% in 2010 and 18% in 2011, the fastest two-year gain since 1995, according to analysts' estimates compiled by Bloomberg. Of the 23 companies in the S&P 500 that reported profits since July 12, all but three have topped EPS forecasts, Bloomberg data show.
Bank of America tumbled 9%, Citigroup retreated 6% and GE lost as much as 4.1%. The three companies reported third-quarter earnings per share that beat analysts' expectations but missed forecasts on sales.