NEW YORK — Corporate America's Rock of Gibraltar was looking shaky Friday, and that triggered a landslide on Wall Street.
General Electric Co., known for the dependability of its earnings, stunned the financial world by saying its first-quarter profit sank 6%. Even worse, it reported earnings of 43 cents a share -- nowhere near the 51 cents analysts expected -- and cut its profit forecast for the rest of the year.
The GE news, along with a report showing that consumer sentiment dropped to its lowest level in 26 years, had investors rethinking the strength of the economy and the stock market.
The Dow Jones industrial average sank 256.56 points, or 2%, to 12,325.42. All but one of the Dow's 30 stocks fell.
Aside from its enormous size, GE's diverse product lines -- industrial products, commercial finance, healthcare and media -- have long made the company a stand-in for the economy's health.
"Everyone in the market sees GE as almost the Rock of Gibraltar -- quarter-in, quarter-out delivering low double-digit results that investors had come to prize and look for," said David Dietze, chief investment strategist at Point View Financial Services in Summit, N.J. "Because of its size and diversification, it's seen as a proxy for the global economy."
The sell-off -- Wall Street's worst in almost a month -- raised fears about whether the market's stabilization of the last few weeks can hold.
Investors had lately been buying stocks even in the face of seemingly bad news. That had stirred hope that the worst was over for stock prices even if the economy was likely to keep sliding for a while.
Investors often buy stocks because they anticipate an economic upturn within the next six months or so, meaning the economy could have turned the corner by the fall.
But GE's numbers cast that scenario in doubt.
"It adds to the risk that the slowdown could be a bit stronger than expected," said Gary Schlossberg, senior economist at Wells Capital Management.
GE suffered weakness across several major divisions, most acutely at its commercial and consumer finance units. That was partially expected given that the turmoil reverberating through global credit markets has felled most financial companies, and the environment was particularly treacherous in March.
But earnings also sagged at GE's healthcare and industrial divisions, suggesting that economic weakness is striking across the company.
