Bank results push US stocks lower

US stocks ended a strong week with a flash of selling after Bank of America and General Electric signalled that businesses and consumers are still struggling to pay off their debts.

Stocks slid today as quarterly results from the companies dented hopes that corporate earnings would show strong signs of improvement in the July-September period. A rise in oil also helped the market end well off its lows, following a similar pattern from earlier in the week.

The Dow Jones industrial average fell 67 points to close just below the 10,000 mark, which it had broken through on Wednesday for the first time in a year. Despite the declines stocks still posted big gains for the week.

Bank of America lost more than $2bn (€1.34bn) after preferred dividends in the third quarter. The loss was steeper than expected and stirred fears that struggling consumers won’t be able to increase their spending. The bank, one of the largest recipients of government bailout funds, said its losses from failed loans came to almost 10 billion.

Rivals Citigroup and JPMorgan Chase & Co also posted higher loan losses this week that underscored the challenges brought by high unemployment, weak consumer spending and diminished home values.

“It is, after all, the largest consumer bank and it may have just offered up a reminder that financial strains in the household sector haven’t gone away,” said David Rosenberg, chief economist and strategist at Gluskin Sheff.

The Dow fell 67.03, or 0.7 %, to 9,995.91 after being down as much as 123 points earlier in the day.

The broader Standard & Poor’s 500 index fell 8.88, or 0.8 %, to 1,087.68, and the Nasdaq composite index fell 16.49, or 0.8 %, to 2,156.80.

Two stocks fell for every one that rose on the New York Stock Exchange, where volume came to 1.4 billion, in line with Thursday.

In other earnings news, Google reported a record profit as revenue growth accelerated for the first time since the recession began in December 2007. The stock advanced 19.94, or 3.8 %, to 549.85. During trading, it rose to 554.75, a 12-month high.

IBM Corp. fell 6.34, or 5 %, to 121.64 after the company signalled that its business is improving but still down from where it had been. The value of services contracts that the company signed in the third quarter fell 7% from a year earlier.

Bond prices mostly rose, pushing yields lower. The yield on the benchmark 10-year Treasury note fell to 3.41% from 3.46% late Thursday.

The Russell 2000 index of smaller companies fell 7.16, or 1.2 %, to 616.18.