Stocks hammered by economic worry, AIG, Dell
NEW YORK -- Stocks closed sharply lower as a series of depressing economic and earnings reports have raised concerns about the health of economy.
The Dow Jones industrial average fell 315.79, or 2.5%, to 12,266.39. The decline more than erased the week's 200 point gain.Broader stock indicators also tumbled. The Standard & Poor's 500 index lost 37.05, or 2.7%, to 1330.63, and the Nasdaq composite index declined 60.09, or 2.6%, to 2271.48.
A government report that personal spending, on an inflation-adjusted basis, was unchanged in January provided further evidence of a consumer pullback that's likely to weaken the economy further.
There also was nervousness about what impact the recent slide in the dollar and robust rally in commodities — including a jump in crude oil prices to $103 a barrel— will have on the economy and companies.
Over all, stocks have performed better in February than in January, when credit market turmoil took a heavy toll on the major averages. But disappointing earnings results released late Thursday cast a pall over the market and caused stocks to end the month on a wary note.
Insurer AIG announced a $5.29 billion quarterly loss and took a massive charge to account for its exposure to credit derivatives. The loss caught analysts off guard, as many had expected the company to report a profit.
Computer maker Dell had a 6% decline in quarterly profit, falling below analysts' expectations, and warned that its business could suffer from reduced customer spending.
Wall Street's pullback comes a day after stocks sank as investors fretted over a rise in unemployment claims and the prospect of more bank failures. Federal Reserve Chairman Ben Bernanke warned that while large U.S. banks will likely recover from the recent credit crisis, other banks are at risk of failing.
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