Stocks fell dramatically Friday on concerns about more problems in the banking sector, slower corporate earnings growth, the weak U.S. dollar, and record-high oil prices. Disappointing earnings from Caterpillar, Honeywell, and others worsened concerns about weak third-quarter profits. Meanwhile, Wachovia became the latest financial-services company to reveal how the credit and mortgage crisis had hit its profits. With 24 percent of the Standard & Poor's 500 companies having reported third-quarter results, earnings are on track to have fallen 0.1 percent from the same period a year ago. Even if overall earnings growth ends up a few percentage points higher, as is typical, the third quarter still will represent the worst quarterly growth in more than five years. Light sweet crude oil for November delivery briefly hit a record of $90.07 a barrel in electronic trading. Oil fell $1.19 to settle at $88.28 a barrel on the New York Mercantile Exchange in afternoon trading. The year-long rise in oil prices has accelerated over the last few weeks due to supply concerns, the weak dollar, and worries about an escalating conflict between Turkey and Kurdish rebels in Iraq. The Dow Jones industrial average fell 366.94, or 2.6 percent, to 13,522.02. It was its third-biggest point loss of the year. Friday's decline left the index at its lowest point since September 17, the day before the U.S. Federal Reserve cut interest rates for the first time in four years, triggering a rally that lasted until this week. Twenty-seven of the Dow's 30 components fell. Heavy-equipment maker Caterpillar reported that quarterly earnings rose from a year ago, but results were short of Wall Street expectations. Defense contractor Honeywell reported higher quarterly earnings and revenue, but earnings were below estimates. Shares of 3M fell 6 percent after the company said it is reducing prices on its films for LCD television screens, one of its most profitable businesses. The broader S&P 500 fell 39.45, or 2.6 percent, to 1,500.63. The technology-heavy Nasdaq composite index fell 74.14, or 2.65 percent, to 2,725.16. SanDisk reported lower earnings that surpassed estimates, but also reported gross margins-a key measure of profitability-that were short of forecasts, sending shares of the flash memory drive maker lower. The New York Stock Exchange composite index fell 254.34 to 9,920.27. The American Stock Exchange composite index fell 36.31 to 2,440.28. And the Russell 2000 index fell 26.24 to 798.79.
