Stocks on Friday suffered their worst declines in months after a slew of disappointing quarterly results from key U.S. companies raised alarms that corporate profitability is struggling within a weak global economy.
The Dow Jones industrial average closed at 13,343.51, down 205.43 points or 1.5 per cent. The broader S&P 500 closed at 1433.19, down 24.15 points or 1.7 per cent – marking its steepest tumble since June. In Canada, the S&P/TSX composite index closed at 12,415.98, down 50.14 points or 0.4 per cent.
The selloff followed the latest flurry of financial results, which is adding to concerns that profits and sales at large U.S. companies are feeling a bigger-than-expected impact from the recession in Europe, a slowdown in China and sluggish growth in the United States.
General Electric Co. fell 3.4 per cent after it reported third-quarter revenues that were below analysts’ expectations, even as its earnings rose 8.3 per cent.
McDonald’s Corp. fell 4.5 per cent – the worst performer among the 30 stocks within the blue-chip Dow – after reporting that its earnings fell 3.5 per cent in the third quarter, due to slower-than-expected sales at existing stores and currency fluctuations.
On Thursday after markets closed, Microsoft Corp. said that its earnings fell 22 per cent in its fiscal first quarter, a bigger-than-expected decline ahead of the launch of its new operating system, Windows 8. The shares fell 2.9 per cent.
In Canada, Astral Media Inc. plunged 15.9 per cent after Canada’s broadcast regulator killed Astral’s friendly merger with BCE Inc. in a surprise move on Thursday. BCE shares fell 1.8 per cent.
Key commodities were also hit. Gold fell to $1,724 an ounce, down $20.70 and touching its lowest level in about one month. Gold producers fared better, though: Barrick Gold Corp. rose 0.5 per cent and Goldcorp Inc. rose 2 per cent.
Crude oil fell to $90.05 a barrel, down $2.05. Among Canadian energy producers, Suncor Energy Inc. fell 0.2 per cent and Canadian Oil Sands Ltd. fell 1.6 per cent.