NEW YORK — A U.S. stock rally dissipated Friday, with equities selling off for a fourth day straight, as new concerns about bond insurers overrode solid results from International Business Machines Corp. and General Electric Co.
Also, President Bush called further attention to the economic troubles roiling the globe.
Given that the week included a spree of quarterly reports from the troubled financial sector, it was “pre-ordained to disappoint. We might as well have run around with a target on our back,” said Art Hogan, chief market strategist at Jefferies & Co.
After a short-lived triple-digit rise, the Dow Jones industrial average lost more than 100 points, then retraced a bit, closing down 59.9 points to 12,099.3, giving it a weekly loss of 507 points, or 4 percent.
Of the Dow’s 30 components, 18 ended lower, with noteworthy blue-chip decliners including Verizon Communications Inc. down 4.5 percent, and American International Group Inc. off 4.1 percent, and Merck & Co. Inc. down 2.8 percent.
The Dow’s opening advance was bolstered in part by IBM, up 2.3 percent, after posting 12 percent earnings growth.
Also adding to early blue-chip gains, GE advanced 3.3 percent after the industrial bellwether reported a fourth-quarter profit rise of 4 percent.
But the equities market retraced its move higher after another analyst downgrade hit the financial sector, with President Bush’s call for a fiscal stimulus package only intensifying the negative sentiment.
“There are more concerns with the bond insurers, with MBIA the disaster of the day,” said Peter Boockvar, equity strategist at Miller Tabak, of MBIA Inc., among the bond insurers that had its ratings cut by Banc of America Securities analyst Tamara Kravec.
Shares of MBIA fell 7.3 percent.
The S&P 500 dropped 8.06 points to 1,325.19, a weekly loss of 5.4 percent, while the Nasdaq Composite fell 6.88 points to 2,340.02, down 4.1 percent from the prior Friday’s close.
Volume topped 2.4 billion shares at the New York Stock Exchange and nearly 3 billion shares on the Nasdaq. On both, decliners outran advancers about 2 to 1.
Stocks had retained their gains after the Conference Board released its leading-economic-indicators index, which sank 0.2 percent in December.
More bullish data came from the University of Michigan’s preliminary consumer-sentiment survey for January, which rebounded to 80.5 in January from 75.5 in December.
Advanced Micro Devices Inc. gained 11.5 percent after an earlier decline after the company reported a profit drop. Schlumberger Ltd. continued its sell-off, dropping 3.6 percent after the well-site specialist missed fourth-quarter earnings targets. Sprint Nextel Corp. plunged 24.8 percent after it said it would cut 4,000 jobs and shutter 8 percent of its retail stores in the face of stiff competition.
