Stocks fell sharply Friday, capping a volatile week with a 100-point loss by the Dow industrials, as investors waited to see whether Japan will say the right things at a weekend summit on the Asian fiscal crisis.
The Dow Jones industrial average surrendered an early 49-point gain and fell 100.14 to 8,712.87.It was the third big swing since Monday for the Dow, which plunged 207 points to start the week and rebounded 164 points on Wednesday. By the time the dust settled on Friday, the Dow had lost a relatively modest 122.07 for the week.
Earnings expectations, particularly those at Goldman Sachs, played a prominent role in Friday's outcome.
Microsoft rose 31/2 to 94 11/16 to lead the Nasdaq market higher after the investment firm raised its profit forecast for the software maker. But Disney fell 43/8 to 107 9/16 as the Dow's biggest decliner after Goldman lowered its projections for the media company.
Most broad-market indexes also retreated toward the close despite pledges from U.S. and Japanese leaders to intervene again in the currency markets if necessary.
On Wednesday, the U.S. Federal Reserve sold dollars for yen for the first time since 1992, helping the yen reverse its slide to an eight-year low.
The Fed's move bolstered market confidence but may not have any lasting impact unless Japan acts more aggressively to end its recession, which threatens the global economy and hinders any effort at recovery elsewhere in Asia.
Meanwhile, fears about the health of Japan's banking system intensified Friday after a credit downgrade by Moody's Investors Services against a major bank.
Analysts will be paying close attention this weekend as Japan plays host to a meeting of finance officials from around the world to discuss the Asian situation.
"The world is hoping that Japan will come to the table with some concrete and significant proposals for how it might stimulate its domestic economy," said Charles G. Crane, chief market strategist at Key Asset Management.
Asian markets pulled back Friday after rallying sharply on Thursday. Tokyo's Nikkei stock average fell 0.6 percent, while share prices fell 4.8 percent in the Philippines, 3.8 percent in South Korea, 3.7 percent in Thailand, and 3.3 percent in Indonesia.
Declining issues outnumbered advancers by a 3-to-2 margin on the New York Stock Exchange, where volume totaled 826 million shares, up from 713.74 million on Thursday.
The Standard & Poor's 500 fell 5.72 to 1,100.65, but the technology-heavy Nasdaq composite index rose 8.59 to 1,781.29.
The NYSE composite index fell 3.57 to 563.92, and the American Stock Exchange composite index rose 2.63 to 693.97.
The Russell 2000 index of smaller companies fell 1.27 to 438.47.
In Europe, Frankfurt's DAX index fell 0.3 percent and London's FT-SE 100 fell 1.1 percent.