The stock market plummeted Friday in heavy trading, sending blue-chip indexes to their worst one-day losses in more than two years, as another surge in oil prices and disappointing earnings from some big-name companies raised new concerns about the economy's health.
The Dow Jones industrial average tumbled 213.32 points, or 2%, to 10,667.39, giving up all of its gains from a rally that had stoked widespread optimism in the first two weeks of the year.
Technology stocks, which had led the new year's advance, were hit hard as some investors fled. Internet search firm Google Inc. suffered its sharpest sell-off since going public 17 months ago. The company's shares fell $36.98, or 8.5%, to end the day at $399.46.
The market's mood turned Friday as crude oil prices topped $68 a barrel, nearing the record of almost $70 that was reached shortly after Hurricane Katrina devastated the Gulf Coast.
Also, General Electric Co., considered a bellwether for the U.S. economy because of its diverse businesses, reported fourth-quarter sales and earnings that were less robust than many investors had hoped.
GE's report, which followed disappointing quarterly results in recent days from other blue-chip firms including computer chip leader Intel Corp. and chemical titan DuPont Co., revived fears that the economy might be decelerating significantly -- which could point to more profit disappointment ahead and undermine stocks.
"The economy is slowing ... and the market is waking up to that," said Robert Doll, chief investment officer at Merrill Lynch Investment Managers.
The Dow's loss Friday was its biggest percentage drop since May 2003, and the first drop of more than 200 points since March of that year.
But many analysts also said stocks simply were overdue for a pullback after a powerful rally that had lifted the Dow more than 8% since mid-October. The widely watched index closed above 11,000 on Jan. 9, its first breach of that level since 2001.
Some experts cautioned against betting that the economy would continue to lose steam.
"Yes, there was a slowdown in the fourth quarter. We know that," said Drew Matus, an economist at brokerage Lehman Bros. in New York. "But I think things are shaping up for a very good first quarter."
Indeed, the government reported Thursday that new claims for unemployment benefits in the week ended Jan. 14 were the lowest since April 2000, a potential sign of strength in the job market.
