WALL STREET (From CBS News) -- Poor earnings reports from companies large and small pounded the stock market Friday in a sour end to an otherwise strong week of trading.
The Dow closed down 205 points Friday, or 1.5 percent, at 13,344, its worst finish since June. The Standard & Poor's 500 index fell 24, or 1.7 percent, to end at 1,433. The Nasdaq composite index, heavy with technology companies, shed 67 points to 3,006, a 2.2 percent decline.
Disappointing results from three giants of the Dow Microsoft, General Electric and McDonald's were to blame. Financial analysts expect corporate earnings for July through September to be lower than the same period a year ago, which would be the first yearly decline in three years.
"And once you get one quarter of negative earnings, it's a precursor," said Doug Cote, chief market strategist at ING Investment Management in New York. "It's the cockroach theory: if you find one, there's probably many more."
All 10 industry groups in the S&P 500 fell, led by materials and technology stocks. For a time Home Depot and Bank of America were the only stocks in the Dow trading higher for the day, but by 2 p.m. they were lower, too.
McDonald's profit shrank as a strong dollar hurt international results, which account for two-thirds of its business. The fast-food giant's stock lost $4.07 on the day, or 4.4 percent, to $88.79
Sagging PC sales and trouble in Europe took a toll on Microsoft's net income. Its stock lost 86 cents, or 2.9 percent, to $28.64.
General Electric, a bellwether of the economy, fell 3.4 percent to $22.03. The company reported stronger profits early Friday, but its revenue missed Wall Street's expectations.
Orders for new equipment and services sank, mainly because wind turbine orders have fallen because a key U.S. federal subsidy for wind power expires at the end of the year.
As corporate earnings roll in, banks and so-called consumer discretionary companies, which include luxury stores and hotels, are projected to report the best growth.
Analysts expect companies dealing in metals and other materials to report the worst results, followed by energy companies. But it's technology companies like IBM, Intel and Google whose weak results have grabbed the most attention.
Weak earnings from Google and a rise in claims for unemployment benefits helped pull the stock market lower Thursday. That snapped a four-day run of gains for the Dow. Google fell again Friday, giving up $13.21 to $681.79.
For the week, the Dow remains up barely 0.1 percent.
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