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Stocks fall on jitters over earnings, tech rout

Published on NewsOK Modified: April 11, 2014 at 5:43 pm •  Published: April 11, 2014
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NEW YORK (AP) — Investors drove the stock market lower for a second straight day Friday as they grew anxious that earnings growth was faltering.

Weaker results at JPMorgan Chase dragged bank stocks lower. And big drops in once-soaring tech stocks pushed the Nasdaq composite down for a third week.

"The market has been trying to come back, but each time the selling just picks up," said Quincy Krosby, a market strategist at Prudential. "The buyers are just not stepping in."

So much for buying on the dip.

Stocks fell from the start of trading on news that JPMorgan had missed analysts' earnings estimates. Investors, who were worried that technology shares were overvalued, dumped those for a second day, with some of the biggest gainers of late falling sharply. Facebook fell 1.1 percent, after a 5 percent drop on Thursday.

The first-quarter earnings season has just started, but investors seem in little mood to wait for results. Financial analysts expect earnings for companies in the Standard & Poor's 500 index to drop 1.6 percent from a year earlier, according to FactSet, a financial data provider. At the start of the year, they expected a jump of 4.3 percent.

If profits do fall, it would be only the second quarterly drop in three years.

"Earnings are going to come in on the sloppy side," said Peter Cardillo, chief market economist at Rockwell Global Capital. "The market needs to correct," he added, referring to a sharp downturn in stocks.

On Friday, the Nasdaq dropped 54.37 points, or 1.3 percent, to 3,999.73. It was only the second time this year the index has closed below the 4,000 mark. February 3 was the last time it ended below that level.

The Dow Jones industrial average fell 143.47 points, or 0.89 percent, to 16,026.75. The S&P 500 fell 17.39 points, or 0.95 percent, to 1,815.69.

All ten industry sectors in the S&P 500 dropped. Consumer discretionary stocks fell the most, down 1.4 percent, and technology stocks were the third-biggest decliner, down 1.2 percent.

Last year, earnings for S&P 500 companies rose 6 percent, a decent showing. Stocks rose much faster — up nearly 30 percent for the index. Helping stocks rise was the Federal Reserve bond buying designed to stimulate the economy.

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