Dow Falls On Weak Earnings Reports; Loss of 213 Points Erases '06 Gains
Stocks suffered their biggest one-day drop in two years Friday as rising oil prices and surprisingly weak financial reports from blue- chip companies General Electric Co. and Citigroup Inc. spread gloom across Wall Street.</br></br>The selling began at the opening bell and mounted through the day, driving the Dow Jones industrial average down 213.32 points, or 2 percent, to 10,667.39. The blue-chip index, which last week broke 11,000 for the first time in more than four years, is now slightly below where it began the year.</br></br>The selling spread across the broader market as well. The Standard & Poor's 500-stock index fell 23.55 points, or 1.8 percent, to close at 1261.49. Technology stocks plummeted as a Justice Department request for Web-searching information from Google Inc. pushed the company's stock down more than 8 percent, its biggest one- day drop ever. The Nasdaq fell 54.11, or 2.4 percent, to close at 2247.70.</br></br>Traders and money managers said the day's losses stemmed from a litany of grim news that mounted through the day. First, oil prices spiked on fears that international sanctions against Iran over its nuclear ambitions could shut down an important source of oil. A futures contract for a barrel of crude closed at $68.35 in New York on Friday, up $1.52, or 2.3 percent. A moderating oil price was among the main drivers of last year's fourth-quarter stock market rally.</br></br>"We are making another run at $70 a barrel, and we are doing it without a hurricane having knocked out 70 percent of U.S. production," said Jack Caffrey, equity strategist at J.P. Morgan Private Bank, referring to last year's hurricane season. "You couple that with the stark reminder of all the geopolitical jitters out there, and you wind up with investors wanting to get a little more defensive."