Stocks fell for the third straight session on Friday as major indexes reached two-month lows. Investors fretted about corporate earnings after a string of disappointing releases this week. Firm results from blue-chip names like General Electric (GE) and United Technologies (UTX) had little impacton the broader market, notes Standard & Poor's MarketScope.
The Dow Jones industrial average was off 78.48 points, or 0.75%, to 10,392.99. The broader Standard & Poor's 500 index eased 7.59 points, or 0.65%, to 1,167.82. The Nasdaq composite index fell 11.61 points, or 0.57%, moving to 2,034.27.
A rise in oil prices and a weaker than expected consumer sentiment report also weighed on Friday's market.
Looking ahead, next week is another busy week on the earnings front. On Monday comes financial services firm American Express (AXP). On Tuesday, telecom BellSouth (BLS) and IT outfit Computer Associates (CA) report. Cigarette group Altria (MO) reports on Wednesday along with candy maker Hershey Foods (HSY). Thursday brings biotech outfit Amgen (AMGN), while Friday brings updates from consumer products outfit Procter & Gamble (PG) and fast-food giant McDonalds (MCD).
In economics news next week, consumer confidence data for January is due out on Tuesday. The gauge is seen falling to a 101.5 reading in January from 102.3 reading in the previous month. On Thursday, orders for big ticket items for December are expected to show a slowdown to a 0.4% increase from a 1.4% increase in the previous month. On the same day, first time jobless claims for the week ending Jan. 22 are expected to rise to 341,000 from 319,000 in the previous week.
Spooking investors on Friday was a greater-than-expected decline in the preliminary University of Michigan consumer sentiment index. It fell to 95.8 in January from the 11-month high of 97.1 in December. Yet, the current conditions component rose to 110.8 from 106.7 the month before.
Higher oil prices also weighed on stocks, with NYMEX crude futures moving above the $48 per barrel mark on short-covering and rising worries over the looming cold weather front expected to hit the U.S. Northeast.
GE, a Dow component and industrial bellwether, said quarterly profit rose 18%, lifted by growth in its finance, transportation and health-care businesses.
Meantime, United Technologies, another industrial conglomerate, posted 11% higher quarterly profits thanks to strong sales at its Otis elevator and Carrier air conditioning units.
In other stocks news, Automatic Data Processing (ADP), the biggest payroll and tax filing processor, posted 9% growth in quarterly profits, thanks to strength in several business segments.
On a down note, Xilinx (XLNX), a semiconductor maker, reported 7.8% lower quarterly profit, dented by heavy inventory levels and weaker-than-expected orders.
In merger news, the Financial Times reoported electronic stock market operator Archipelago is the leading candidate to buy Instinet (INGP), the electronic brokerage majority owned by Reuters (RTRSY) in a deal worth as much as $3 billion.
Treasuries finshed higher in price Friday as stocks fell following the University of Michigan consumer sentiment report. The 10-year Treasury note's yield fell to 4.14%.
European stock markets closed mixed on Friday. In London, the Financial Times-Stock Exchange 100 index was up 2.50 points, or 0.05%, moving to 4,803.30 following a report that December UK retail sales unexpectedly fell 1.0%, the steepest slide since 1981.
Germany's DAX index was off 6.73 points, or 0.16%, to 4,213.70. HVB Group was lower after the bank said it took a 2.5 billion-euro charge to overhaul its real estate portfolio and will omit a 2004 dividend. Deutsche Boerse was lower after WestLB Equity Markets downgraded the stock to outperform from buy. Walter Bau fell after five of its 27 banks rejected builder's plans for a financial reorganization.
In Paris, the CAC 40 index added 11.75 points, or 0.31%, to 3,854.19 even though Dec. French consumer spending unexpectedly rose 0.2%. Boiron was lower after Fideuram Wargny Societe de Bourse downgraded the stock to reduce from hold. Coletica was higher after the company said fourth quarter sales rose 46%. Groupe Vallourec was higher after agreeing to buy the 45% of Vallourec & Mannesmann Tubes it doesn't already own.
Asian markets finished lower on Thursday. Tokyo's Nikkei average fell 46.40 points, or 0.41%, to 11,238.37 as investors cashed in profits ahead of the weekend market close. Sony led the market lower with a 3% decline after the consumer electronics outfit cut its profit estimate. Panasonic-brand maker Matsushita Electric Industrial shed 1%, while Sharp slid 0.3%.
In Hong Kong, the Hang Seng index gave up 62.57 points, or 0.46%, to close at 13,481.02. PCCW declined 1.6% as it resumed trading Friday after it announced on Thursday that China Netcom Group will buy a 20% stake in the company.