Wretched start on Wall Street

GE's weak results highlight market's concerns about corporate profits.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By CNNMoney.com staff

Do you expect to change jobs soon?
  • Yes, I'm worried about layoffs.
  • Yes, I'm hoping to move up.
  • No, fingers crossed. I'm happy where I am.
  • Not sure.

NEW YORK (CNNMoney.com) -- Stocks tumbled Friday morning as General Electric's lower quarterly earnings added to the realization that corporate profits are a lot weaker than had been anticipated.

The Dow Jones industrial average (INDU) fell 176 points, or 2% in the early going. The Standard & Poor's 500 (SPX) index lost 15 points or 1.8%. The Nasdaq composite (COMP) lost 21 points or 1.4%.

The decline follows a market plunge on Thursday.

Art Hogan, chief market strategist for Jefferies & Co., said that more than a third of the 150 companies that have reported fourth-quarter earnings have missed expectations, which is much higher than normal, and preventing many companies from offering guidance for 2009.

"We just went through a disastrous fourth quarter across the board," said Hogan, who expects more bad news from the hundreds of companies that report next week.

"We underestimated how bad the fourth quarter was, plain and simple," he said.

Tim Crimmins, senior equity trader for Lord Abbett, said the "choppiness and volatility" in the markets could continue through the first quarter, with lots of down days, punctuated by the occasional rally, like the one on Wednesday.

"I think it'll last until at least through earnings season, and we have to go through another earnings season before we get some clarity," said Crimmins.

GE: Investors are focusing their attention on GE (GE, Fortune 500), which missed expectations on its quarterly results.

The company reported fourth-quarter earnings of 36 cents per share attributable to common shareholders, down from 68 cents a year ago, and revenue of $46.2 billion.

Analysts were expecting GE to post earnings of 37 cents per share and revenue of $50 billion, according to a consensus of opinion compiled by Thomson Reuters. Shares fell 4% at the open.

Techs: Google (GOOG, Fortune 500) reported late Thursday that its fourth-quarter net income tumbled 68% to $382 million. However, excluding certain charges, the company earned $5.10 a share, better than consensus estimates of $4.95 per share. Shares were little changed in morning trading.

Drugmakers: Stocks to watch include Pfizer (PFE, Fortune 500) and Wyeth (WYE, Fortune 500). The Wall Street Journal reported that Pfizer is in talks to acquire the rival drugmaker in a deal that could be worth more than $60 billion.

International markets: Asian markets closed lower and European markets were down in the afternoon.

Oil and money: Oil prices slipped $2.13 to $41.54 a barrel on the New York Mercantile Exchange. The dollar dipped against the yen, but rose versus the euro and the British pound. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.