NEW YORK — U.S. stocks plunged Friday, as a double dose of discouraging earnings reports and concerns about the pace of the economic recovery wiped out the Dow Jones industrial average’s gains for the week.
The Dow, which snapped its seven-day winning streak on Friday, closed down 261.41 points, or 2.5 percent, to 10,097.90 and finished the week down 0.98 percent. The S&P 500 index declined 31.60 points, or 2.9 percent, to 1,064.88, ending the week down 1.2 percent. Both indexes have fallen in three out of the past four weeks.
The Nasdaq composite index fell 3.1 percent to 2,179.05 and ended the week off 0.8 percent.
The stock market’s deep slide upends a week that started on a strong note, as earnings from Alcoa Inc. and Intel Corp. fueled optimism about the profits of U.S. corporations. But the gains proved hard to hold, with concerns about the outlook for the U.S. economy in the second half moving front and center in investors’ minds. Those concerns are casting a harsh light on earnings from large financial corporations with deep roots in Main Street.
Bank of America Corp.’s 9.2 percent drop led the blue chips lower, after a loss in its mortgage business and a falloff in Wall Street trading profits dragged on second-quarter results. Adding to the jitters was a report that showed consumer sentiment dropped to its worst level since March 2009, the latest in a string of downbeat data that slammed Wall Street.
“For the past several months, the majority of the economic reports have been positive enough to say we’re still in a long-term growth trend, but within the past couple weeks the trend is becoming less positive,” said Randy Frederick, director of trading and derivatives at Charles Schwab. “It’s almost like we’re flattening out.”
Investors turned pessimistic about growth prospects for other major U.S. companies as Citigroup Inc. and General Electric Co. posted lackluster results. There also were growing worries about how financial regulatory overhaul will hurt bank earnings.
