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Stocks tumble on Bank of America, GE earnings

October 17, 2009|Associated Press

NEW YORK — Stocks slumped Friday, sending the Dow industrials back below 10,000, on some downbeat quarterly reports and a lower-than-expected consumer confidence index. But the major indexes ended up for the week.

The market opened lower after Bank of America and General Electric posted third-quarter results providing evidence that businesses and consumers were still struggling to pay off their debts.

Bank of America, the country's largest lender to consumers, reported a $1-billion net loss, worse than Wall Street expected.

General Electric's profit fell 44%, hurt by much lower earnings at its financial arm, GE Capital, which lends money to a variety of businesses.

Helping to depress stocks was a drop in the Reuters/University of Michigan consumer sentiment index, which fell to 69.4 this month from 73.5 in September.

The Dow slid 67.03 points, or 0.7%, to 9,995.91 after being down more than 120 points at its low of the day.

The broader Standard & Poor's 500 index lost 8.88 points, or 0.8%, to close at 1,087.68, and the Nasdaq composite index dropped 16.49, or 0.8%, to 2,156.80.

Two stocks fell for every one that rose on the New York Stock Exchange.

For the week, the Dow gained 1.3%, the S&P 500 added 1.5% and the Nasdaq rose 0.8%.

The reports from BofA and GE overshadowed solid results released by Google after the closing bell Thursday. Shares of Google jumped 3.8% on Friday to their highest close in 15 months. BofA sank 4.6%, while GE gave up 4.2%.

Another rise in the price of oil also limited the stock market's fall by lifting shares of energy companies. Crude futures rose 95 cents to $78.53 a barrel.

The dollar rallied Friday for the first time in five days. But an index of the currency's value against other major currencies dropped 1.1% for the week.

Yields on long-term Treasury bonds fell. The benchmark 10-year T-note dropped to 3.41% from 3.46% late Thursday.

In overseas trading, key stock indexes fell 0.6% in Britain, 1.5% in Germany and 1.4% in France.

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