(Updates to close, changes byline)
By Kevin Plumberg
NEW YORK, April 11 (Reuters) - U.S. stocks slumped on
Friday after surprisingly weak earnings from General Electric
Co and data showing consumer sentiment at a 26-year low fed
fears the economy is in recession.
Shares of GE <GE.N>, viewed as an economic bellwether
because of the range of its businesses, sank almost 13 percent
in their worst decline since the October 1987 market crash.
The news also dragged down shares of a wide range of
multinational companies, including IBM <IBM.N> and United
Technologies <UTX.N>.
GE's unexpected 6 percent profit drop was the biggest
shock yet to the U.S. industrial sector from the credit crisis
and cast a shadow over the upcoming quarterly earnings season.
For details see []
The Reuters/University of Michigan Surveys of Consumers
said its preliminary index of confidence fell sharply in April
to its lowest level since 1982, when the economy was plagued
by low growth and high inflation. []
"GE is a reminder that there is still bad news out there,"
said John Praveen, chief investment strategist at Prudential
International Investments Advisers LLC in Newark, New Jersey.
"It keeps the financial problem and credit problem alive."
The Dow Jones industrial average <> was down 256.56
points, or 2.04 percent, finishing the day at 12,325.42. The
Standard & Poor's 500 Index <.SPX> was down 27.72 points, or
2.04 percent, ending at 1,332.83. The Nasdaq Composite Index
<> was down 61.46 points, or 2.61 percent, at 2,290.24.
Apple Inc <AAPL.O> tumbled 4.8 percent to $147.14 as
negative sentiment on the outlook for consumer spending
spread, and was the biggest factor in the Nasdaq 100's <>
largest daily drop since Feb. 5.
On the New York Stock Exchange, decliners beat advancers
by a ratio of slightly more than 3 to 1, though volume was
modest with 1.26 billion shares changing hands, below last
year's average daily volume around 1.90 billion.
On Nasdaq, decliners exceeded advancers by a factor of
almost 4 to 1 with 1.90 billion shares trading, down from
2007's daily average of 2.17 billion shares.
Shares of GE slid 12.8 percent to $32.05.
Other recent gloomy earnings from U.S. companies have
contributed to fears that the economy is heading for or is
already in a recession.
United Parcel Service Inc <UPS.N>, the world's largest
package delivery company, forecast weak first-quarter
earnings. Aluminum producer Alcoa Inc <AA.N> said its
quarterly profit was cut in half due to higher energy costs
and a weak dollar. Advanced Micro Devices <AMD.N> gave a
revenue estimate below expectations and said it would cut its
work force.
Frontier Airlines Holdings Inc <FRNT.O> filed for
bankruptcy, citing unexpected problems with its principal
credit card processor. Frontier shares plummeted 69 percent to
48 cents.
The parade of bad earnings news was a foreboding sign
ahead of next week's results from Intel Corp <INTC.O>, Johnson
& Johnson <JNJ.N>, Coca-Cola Co <KO.N> and JPMorgan Chase & Co
<JPM.N>, among others.
Amid concerns about the global credit crisis, finance
ministers and central bankers from the Group of Seven nations
were meeting in Washington. A communique was expected to be
issued Friday evening.
"If you had some very strong support for the dollar, it
would be helpful in many ways to the financial markets," said
Jim Awad, chairman of W.P. Stewart & Co. Ltd in New York.
(Additional reporting by Caroline Valetkevitch; Editing by
Jan Paschal)
