Bank of America, GE results weigh on market
U.S. stocks fell on Friday after disappointing results from General Electric Co
Analysts said investors may have become too optimistic going into the earnings season, in contrast to the previous quarter when the bar was set too low. The search for revenue growth has been a key theme so far after the last two quarters were characterized by companies' cost cutting.
Conglomerate GE reported weaker-than-expected revenue and Bank of America posted a $1 billion loss, reflecting the struggle businesses and consumers face with managing their debt.
Friday's results contrasted sharply with those of JPMorgan Chase & Co
On one hand, earnings aren't a disaster, but on the other hand it's not anything that's propelling the market significantly higher, either, said Todd Salamone, vice president of research at Schaeffer's Investment Research in Cincinnati, Ohio.
The market as a whole has held up these first couple weeks and there were a lot of concerns it was setting up for a fall because companies could no longer eke out cost cutting.
Bank of America's shares fell 4.4 percent to $17.30, and GE dropped 4.2 percent to $16.09.
The Dow Jones industrial average <.DJI> fell 68.54 points, or 0.68 percent, to 9,994.40. The Standard & Poor's 500 Index <.SPX> lost 8.58 points, or 0.78 percent, to 1,087.98. The Nasdaq Composite Index <.IXIC> gave up 14.78 points, or 0.68 percent, at 2,158.51.
Further pressuring the market was the Reuters/University of Michigan Surveys of Consumers, which said its preliminary index of sentiment for October fell unexpectedly on concerns over personal finances. The news overshadowed an earlier report that showed industrial production rose in September.
But traders said Friday's decline may push the market higher next week as investors see an opportunity to jump in.
In the options market, the majority of sentiment indicators are still in a mode that is bullish ... Traders expect to see more upside surprises (in earnings) than downside, said Randy Frederick, director of trading and derivatives at Charles Schwab in New York.
Among stocks that gained, Google Inc
International Business Machines Corp
(Additional reporting by Angela Moon; Editing by Kenneth Barry)
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