NEW YORK (CNNfn) - U.S. stocks tumbled Friday, with the Nasdaq composite index falling to its lowest levels in more than four months, after a major automaker, computer maker, and retailer signaled that business remains weak.
The Dow Jones industrial average lost more than 150 points, hit by a big slide in General Motors, after rival automaker Ford cut earnings forecasts and announced job cuts. A profit warning from Dell Computer sparked losses in the chip and PC sector.
And Gap, the second-most actively traded company on the New York Stock Exchange, readied investors for a disappointing quarter. Wal-Mart, the No. 1 retailer, also declined.
"We need to get corporate earnings to turn around before investors regain confidence," Troy Nickerson, co-head of Nasdaq trading at Robertson Stephens, told CNNfn's The Money Gang.
The vigil before Tuesday's Federal Reserve meeting has been a dark one. Wall Street recorded another losing week, a five-day period when more than 20 companies said sales or profits will fall short.
In another setback for U.S companies, government data showed exports fell 2 percent in June. An unfavorable ruling in Microsoft's antitrust appeal sent shares of the world's most-valuable technology company lower by nearly 5 percent.
"There's been plenty of reasons to sell stocks today," Art Hogan, market analyst at Jefferies & Co, told The Money Gang.
Investors fleeing stocks sought safety in Treasury securities and gold shares.
The Nasdaq fell 63.31 points, or 3.3 percent, to 1,867.01, its worst finish since April 10, when the index closed at 1,852.03. On the week, the index declined 4.6 percent.
The Dow industrials slumped 151.74, or 1.5 percent, to 10,240.78, widening its weekly loss to 1.7 percent. A broader index, the Standard & Poor's 500, slid 19.69, or 1.7 percent, falling 2.4 percent over the last five sessions.
More stocks fell than rose. On the New York Stock Exchange, declining issues topped advancing ones 1,916 to 1,148 on trading volume of 970 million shares. Nasdaq losers beat winners 2,382 to 1,212. More than 1.2 billion shares changed hands.
The dollar fell against the euro and was flat versus the yen.
Corporate troubles
Shares of Dell Computer fell more than 9 percent after the company cut profit forecasts following a quarter of sinking earnings.
In warning this week, Dell (DELL: down $2.38 to $23.00, Research, Estimates), which has been cutting prices to stay competitive, joins a diverse group of companies including Tiffany, Reader's Digest, and La-Z-Boy. For its second quarter, the computer maker's profit fell to 16 cents a share.
At least five brokerages cut their earnings forecast for Dell. Intel (INTC: down $2.09 to $28.07, Research, Estimates), the No. 1 seller of computer chips, also declined. So did Applied Materials (AMAT: down $2.13 to $42.57, Research, Estimates), the biggest maker of chip-making equipment.
Ford Motor (F: down $1.77 to $21.70, Research, Estimates) said it plans to cut about 10 percent of its office staff in North America and announced that earnings in the current year will miss forecasts by a wide mark. General Motors (GM: down $3.10 to $59.47, Research, Estimates) and DaimlerChrysler (DCX: down $3.25 to $43.75, Research, Estimates) declined.
A major retailer also warned about profits. Gap (GPS: down $1.92 to $21.43, Research, Estimates) – which operates Old Navy, Banana Republic and Gap stores – said third-quarter earnings could fall below 21 cents a share. Wall Street had been expecting 26 cents, according to First Call.
"These are all quality names in their sectors, all giving negative guidance, and I think that's shaking investors," Brett Gallagher, head of U.S. equities at Julius Baer, told CNNfn's Market Call.
Microsoft (MSFT: down $2.74 to $61.88, Research, Estimates) added to its earlier losses after the U.S. Court of Appeals in Washington rejected its request to delay its antitrust case. The decision clears the way for the case to be sent back to a new U.S. District Court judge to decide what penalty the software maker should face for antitrust violations.
Ciena (CIEN: down $0.84 to $18.78, Research, Estimates) continued its slide from Thursday, when the maker of communications equipment cut its growth targets.
Hewlett-Packard (HWP: down $0.08 to $24.05, Research, Estimates) topped forecasts with earnings that fell sharply from year-earlier figures. But the computer and printer maker said current quarter sales and profit should fall under continued pressure.
An economic slowdown that began last summer has worsened. Government data showed Friday that a 2 percent slide in exports helped widen the nation's trade deficit to $29.4 billion in June from a revised $28.5 billion in May. Imports also fell, but by less than exports, which have been hurt by the strong dollar and slowing overseas demand.
In other data, the University of Michigan said its index of consumer attitudes rose to 93.5 from 92.4 in July. Analysts expected a decline.
Still, the sentiment numbers are much lower than levels last year, when stock prices were higher and unemployment hovered near a 30-year low.
After cutting interest rates six times this year, the Federal Reserve Tuesday is expected to lower the federal funds rate for overnight lending between banks to 3.50 percent from 3.75 percent.
But the lowest interest rates since 1994 haven't helped a market hungry for rising profits.
"They (investors) want tangible evidence that the earnings slippage is behind us," Joseph Battapaglia, market strategist at Gruntal, told CNNfn's Market Call.
They may not get that evidence until the first three months of 2002. That's when analysts surveyed by First Call expect profits among America's largest companies to rise following four straight quarters of decline.
One bright spot on the day: gold. Barrick Gold (ABX: up $0.21 to $16.80, Research, Estimates), Newport Mining (NEM: up $0.34 to $21.48, Research, Estimates), and Homestake Mining (HM: up $0.08 to $8.71, Research, Estimates) all rose.
And the yield on the 10-year Treasury note, which moves inversely to its price, fell to 4.83 percent. 
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