New York A surge in oil prices sent the major stock indexes to their lowest levels of the year Friday as investors overlooked a strong earnings report and a bullish outlook from General Electric Co. All three indexes fell for the third straight week.
Frigid weather in the Northeast and concerns about possible OPEC production cuts pushed crude futures substantially higher. A barrel of light crude settled at $48.53, up $1.22, on the New York Mercantile Exchange.
Even an 18 percent jump in earnings at General Electric -- a market bellwether after the conglomerate's varied holdings -- failed to hold investors' attention for long, highlighting the deep concerns on Wall Street since a three-week selloff began at the start of the year. Oil prices, a weak dollar, concern about interest rates and the upcoming Iraqi election all have been cited as potential problems that have kept investors on the sidelines.
"I think you're seeing people reacting to things rather than anticipating things. There's a lot of caution out there," said Paul McManus, chief investment strategist at Independence Investments. "I think people are sitting around, waiting for earnings to get past us before making any kind of moves."
The Dow Jones industrial average fell 78.48, or 0.75 percent, to 10,392.99.
Broader stock indicators also fell. The Standard & Poor's 500 index was down 7.54, or 0.64 percent, at 1,167.87, and the Nasdaq composite index dropped 11.61, or 0.57 percent, to 2,034.27.
The last time the major indexes sustained losses for this long was a four-week stretch in late June through late July. The Dow and S&P; haven't started January with three down weeks since 1977. Profit-taking, concerns about inflation and some high-profile earnings disappointments -- despite a strong overall earnings season -- all contributed to the slump.
For the week, the Dow fell 1.56 percent, the S&P; slipped 1.41 percent, and the Nasdaq dropped 2.57 percent.
Analysts said the week ahead could feature more of the same, with worries about the Iraqi elections, production cuts from OPEC after its Jan. 30 meeting, and the upcoming Federal Reserve meeting on Feb. 1-2 adding to the mix of uncertainty.
GE remained confident regarding its 2005 earnings. The Dow component, which beat earnings estimates by a penny per share for the quarter, said it expected earnings to grow 10 percent to 15 percent this year and would be sustained through 2006 as well. GE nonetheless slipped 24 cents to $35.13.
"When good news leads to more selling, as opposed to a broad-based rally, that's a sign that the market is really struggling," said Michael Sheldon, chief market strategist at Spencer Clarke LLC. "GE did well, but this is not the kind of environment where investors should jump in and try to be a hero."
Fellow Dow industrial United Technologies Corp. added 30 cents to $100.08 after beating Wall Street profit forecasts by 2 cents per share. Earnings at the industrial manufacturer rose 11 percent for the quarter, and company executives expect earnings to grow by up to 15 percent in the coming year.
Earnings were generally good in the financial sector, but Wall Street's reactions were mixed. PNC Financial Services Inc. beat Wall Street estimates by 4 cents per share and KeyCorp surpassed expectations by 8 cents per share after one-time charges. PNC nonetheless tumbled $1.80 to $52.85, while KeyCorp rose 83 cents to $32.53.
A pair of Dow companies were upgraded by analysts Friday, with Verizon Communications Inc. boosted to a "buy" by Deutsche Bank, and Citigroup Inc. receiving a "buy" rating from Merrill Lynch. Verizon gained 23 cents to $36.53 and Citigroup was up 16 cents at $47.93.
Declining issues barely outnumbered advancers on the New York Stock Exchange, where preliminary consolidated volume came to 2.04 billion shares, compared with 2.11 billion on Thursday.