By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market opened with deep
losses on Friday, as disappointing earnings and renewed fears over
deflation in the euro zone prompted heavy selling on Wall
Street.
The main indexes are on track to finish the week lower and
record their steepest monthly decline since May 2012, as recent
earnings news has been lackluster, while fears over emerging
markets have sent many investors for cover.
Investors found no solace from U.S. consumer spending data,
which showed Americans spent more in December, but their incomes
stagnated.
The S&P 500 (SPX) opened 17 points, or 1%, lower at
1,777.11, and was set to record its third weekly decline in a row.
The Dow Jones Industrial Average (DJI) began the session with a
triple-digit loss, falling 187 points, or 1.2%, to 15,666.886. The
blue-chip index is headed for the second straight week of
losses.
The Nasdaq Composite (RIXF) opened down 34 points, or 0.9%, at
4,088.18. The tech-heavy index is set to register second straight
week of declines. Follow our stock market live blog.
Stocks endured heavy selling in most of the sessions this week,
as sharp drops in emerging-markets currencies prompted nervous
investors to flee riskier assets including stocks and lock in
profits from a spectacular year.
A batch of disappointing earnings before Friday's opening bell
weighed on stocks.
Shares of Mattel(MAT) slid more than 10% after the toy maker
reported a surprise fall in fourth-quarter sales due to sharp
declines in core brands such as Barbie and Fisher-Price.
Wal-Mart Stores Inc (WMT) shares dropped 1.4% after the world's
largest retailer cut its fourth-quarter earnings forecast. Wal-Mart
warned the sales impact from the reduction in the U.S. government
food stamps was greater than expected.
Amazon.com(AMZN) skidded 7.3% after sales came in just shy of
estimates in its fourth-quarter earnings report released after the
close on Thursday.
Chevron (CVX) shares slid 3.7% as the oil company reported lower
profit and revenues than expected.
MasterCard Inc. (MA) shares slid 6.3% after the credit-card
company missed Wall Street's expectations for its fourth-quarter
profits.
One of the bright spots in the market was Zynga(ZNGA). Shares
surged 20% after the games maker said it would cut its head count
and buy NaturalMotion, a mobile videogame company, as it announced
results late Thursday.
In economic news, data were fairly mixed. Consumer spending rose
sharply in December for the second month in a row, but Americans
had to dip into their savings to pay for their purchases. The
incomes of Americans, however, were unchanged in December and they
fell after adjusting for taxes and inflation. Economists polled by
MarketWatch had forecast a smaller gain in spending but a slight
rise in income.
Consumer sentiment, however, declined in January, as weak jobs
growth continuing to weigh on consumers, according to Friday
reports on a gauge from the University of Michigan and Thomson
Reuters.
The Chicago PMI fell in January to a still-strong 59.6 from 60.8
in December, but employment weakened for the second straight month.
Economists polled by MarketWatch had expected the index, formally
known the Chicago business barometer, to decline to 59.8. Readings
above 50.0 indicate expansion.
In other markets, 10-year Treasurys extended a rally, oil fell
while gold inched higher and the dollar held on to recent gains.
European stocks fell. In Asia, Japanese stocks eased.
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