by Staff and wire reports, USA TODAY
NEW YORK -- On the 25th anniversary of the 1987 stock market crash, trading wasn't quite as grim, but decidedly downbeat.
On Friday, the Dow Jones industrial average ended down 205.43 points, 1.5%, to 13,343.51, the index's worst day since a 2% drop June 21, when the S&P 500 lost 2.2%.
Other major indexes closed sharply lower. The tech-laden Nasdaq composite index finished the day 67.25 points lower, 2.2%, to 3005.62. The broader Standard & Poor's 500 index closed down 24.15 points, 1.7,%, to 1,433.19.
Investors took stocks down hard Friday after a string of disappointing earnings from industry stalwarts -- McDonald's, General Electric, Microsoft, Google, to name a few -- served as a reminder of the economy's struggles.
Investors have been bracing for muted earnings in the third quarter.
Analysts now expect S&P 500 earnings growth of 0.04%, essentially flat and the lowest growth rate since the third quarter of 2009.
Half the 10 sectors in the S&P 500 are expected to post lower earnings, including materials, down 21%, and energy, down 17%.
The market's recent troubles disrupt what had been a miniature rally in the making. Despite falling 1.8% on Friday, the S&P 500 is up 14% this year.
Investors continue to worry about a major slowdown in earnings growth and uncertainty over who will win the presidential election next month and what that might mean for corporate America.
"All these things are sending a signal the economy is slowly tortoising along," says Doug Sandler of Riverfront Investment Group.
Even so, Sandler thinks recent selling is a short-term disruption. "You'll have days like these," he says.
On Friday, McDonald's (MCD) , down 4.6%, led a broad drop in the Dow. Profits of the fast-food giant sank as a strong dollar hurt international results, which account for two-thirds of its business.
General Electric (GE), another economic bellwether, fell 3.4%. The company reported stronger profits early Friday but its revenue missed Wall Street's expectations. Orders for new equipment and services sank, especially orders for wind turbines since a key federal subsidy expires at year-end.
Among other stocks making big moves, Chipotle Mexican Grill (CMG) plunged nearly 16%, the most in the S&P 500, after the burrito chain forecast that revenue growth would slow sharply next year. The stock had been a favorite among investors thanks to super-fast growth in recent years.
Weak earnings from Google and a rise in claims for unemployment benefits helped pull the stock market lower Thursday, snapping a four-day run of Dow gains.
Search giant Google missed big on its third-quarter earnings, worsened by its filing agent, R.R. Donnelley, mistakenly releasing the results four hours early.
After the bell, another tech powerhouse, Microsoft, came up short. Net income for Microsoft (MSFT) fell 22% as PC sales took a dive and as troubles in Europe took their toll.
That followed earlier misses by chip-maker Intel (INTC), which has been hurt by slowing PC sales due to the popularity of tablets and mobile devices, as well as disappointing results from IBM (IBM), best known as Big Blue for its computing clout.
Strikeouts from the tech leaders are akin to the swing-and-miss routine this postseason by onetime slugger Alex Rodriguez. The profit pause is being driven by the transition away from PCs to digital hand-held devices.
Lower PC demand hurts profits of both chip and computer makers, while rising handheld usage creates problems for social media and search engine companies because digital advertising revenue is skimpier.
Earnings misses in tech-land could be a prologue of things to come amid the global slowdown, says J.J. Kinahan, chief derivatives strategist at TD Ameritrade. "It could (affect) the way investors view 2013," he says.
Pat Adams, money manager at Choice Funds, says investors are wondering: "Is this a one-quarter event or a four-quarter event?"
In other Friday trading, the yield on the 10-year Treasury note closed at 1.76%, from 1.83% Thursday.
Oil prices fell 2% to just over $90 a barrel after a pipeline transporting crude from Canada to the Midwest was shut down for repairs.
Gold prices fell $21.60 to $1,723.10, a 1.2$ drop.
Twenty-five years ago today, USA TODAY reported "the Dow Jones industrial average spun into a dizzying free fall, losing 508.32 points to close at 1738.41 ... The Dow's one-day loss of 22.6% destroyed the record set by the 12.8% plunge on Oct. 28, 1929, Black Monday.
Volume was a staggering (for that time) 604.33 million shares, shattering Friday's record of 338.5 million.
"It's a worldwide financial panic," Hugh Johnson, then an analyst at First Albany Corp., said at the time. "People are scared to death."