By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks mounted losses on Friday,
sending the S&P 500 below the 1,800 level as a global rush out
of stocks and emerging-markets currencies intensified, while
company earnings offered investors little respite.
The main indexes are headed for the worst weekly losses in more
than a year. The S&P 500 (SPX) fell below the psychologically
significant level of 1,800 for the first time since Dec. 18,
dropping 29.41 points, or 1.6%, to 1,799.18. The benchmark index is
now 2.8% below its record high, reached Jan 15. The index is set to
record its second straight week of losses.
The Dow Jones Industrial Average (DJI) dropped 244.6 points, or
1.5%, to 15,954.37 and is headed for its worst weekly loss since
May 2012. The last time the blue chip index had two consecutive
days of triple digit losses were in Dec 11. and Dec 12.
The Nasdaq Composite (RIXF) lost 73.17 points, or 1.8%, to
4,145.23 and on track to record a weekly loss after two weeks of
gains. Over the course of the week, the tech-heavy index reversed
its early 2014 gains. Follow the U.S. markets on the live blog
Investors began selling stocks and emerging-markets currencies
heavily on Thursday following weak Chinese economic data. Main
indexes on Wall Street sold off, prompting some analysts to call it
the beginning of a long-awaited correction.
Adding to the pressure from emerging markets, Argentina on
Friday loosened restrictions on purchases of U.S. dollars after it
devalued the peso.
"In 2013 the list of concerns in equity markets really narrowed
and some of them were not even on the radar, but this year some
concerns are back," said Drew Wilson, investment analyst at
Fenimore Asset Management.
"Last year markets gave corporations an amnesty on earnings,
regardless of what they were, but this year corporations need to
prove their profits are sustainable before being rewarded," Wilson
said.
"Today's drop on the S&P 500 still puts us within 5% of the
record high and this environment is certainly beginning to be good
for value investors, who had a difficult time last year as bargains
were scarce," he added.
"We think the flight to quality will continue, as investors
realize how much profit they have made in the S&P 500 last
year. This kind of selling could well be a spark for the
correction," said Uri Landesman, president at Platinum
Management.
Investors digested earnings results from several heavyweights in
a day with no U.S. economic data.
Kimberly Clark Corp. (KMB)announced its fourth-quarter earnings
and jumped to $539 million, or $1.40 per share, beating analysts'
expectations. Shares in the consumer-goods company rose 2.3%.
Procter & Gamble Corp.'s (PG) profit fell, but its core
earnings beat expectations. Shares in Procter & Gamble rallied
2.5%.
Honeywell International Inc. (HON) shares fell in a choppy trade
and were down 0.7% as the company's quarterly earnings missed
expectations.
Bristol-Myers Squibb Co. (BMY) reversed earlier gains and
dropped 4.8% soon after the pharmaceutical company reported a
better-than-expected rise in revenue and earnings.
Shares in Care.com (CRCM) jumped 36% on their debut, after the
non-medical-care management company sold shares at $17, the higher
range of its initial offer.
Shares of Microsoft (MSFT)(MSFT) bucked a weaker tech tone, up
2.6% after the company beat Wall Street estimates with
fourth-quarter results.
Shares of Starbucks (SBUX) were up 3.1% after the coffee giant
posted a 25% rise in profit, though sales missed Wall Street's
targets.
EBay Inc. (EBAY) fell 0.7% after Carl Icahn said he is ready for
a proxy fight to win two seats on the board of the online
auctioneer, with the intent of pushing eBay to spin off PayPal.
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