Wall Street stocks tumble 2.2% on poor US bank results

Stocks on Wall Street crumbled under the weight of poor earnings reports and more concerns about the state of the economy.

Bank stocks, in particular, plummeted, with Bank of America dropping 9.2%, sending the Dow Jones Industrial Average down 261.41 points, or 2.5%, to 1064.88 at the close.

It was the worst day for the Dow since June 29, with all 30 components closing lower. It erased all of the week’s gains with the index ending 1.1% down for the week.

The S&P 500 ended down 31.6 points, or 2.9%, to 1064.88, led by a 4.4% drop in financial stocks. It was down 1.2% for the week.

In economic data, US consumer sentiment tumbled in early July, according to a survey released by Reuters and the University of Michigan. The sentiment index fell to 66.5 in July from 76 in late June.

Bank of America, Citigroup and General Electric all posted lacklustre results. There also was concern about how financial-regulatory overhaul will hurt earnings for the banking sector.

Goldman Sachs Groupbucked the trend to rise 1.9%, although the stock was up as much as 4.7% in earlier trading, after the fraud settlement with Securities and Exchange Commission.

The Nasdaq Composite sank 70.03 points, or 3.1%, to 2179.05, 0.8% drop for the week.

Apple shares rose 0.5% after Steve Jobs said the company will give away free cases as a remedy for the antenna problems that have ravaged iPhone 4.

BP slipped 3.7%, although the Gulf oil spill test survived its first night as pressures steadily rose. The stock is up 10% this week and up 40% off the multiyear lows hit last month.

Other markets: Europe, Asia down

European stocks fell sharply, with financial stocks under heavy selling pressure. Deutsche Bank fell 2.9% and Barclays tumbled 5.2%.

The Stoxx Europe 600 index ended down 1.9% to 248.11. In Germany, the DAX index fell 1.8% to 6040.27, led lower by the utilities sector.

In France, the CAC-40 index fell 2.3% to 3500.16 and the UK’s FTSE 100 index declined 1% to 5158.85.

A stronger yen sent Japanese shares to their biggest percentage loss in more than a month, leading most Asian markets lower.

Japan's Nikkei Stock Average tumbled 2.9% to 9408.36, finishing the week down 1.9%. Year-to-date, the index is off almost 11%.

Australia's S&P/ASX 200 gave up 0.5% to 4422.74, Korea's Kospi lost 0.7% to 1738.45 and Taiwan's Taiex shed 0.5% to 7664.57.

China's Shanghai Composite ended flat at 2424.26 and Hong Kong's Hang Seng Index was also flat at 20,250.16.

Singapore’s Straits Times as up 0.5% at 2957.72 and India’s Sensex was up 0.3% at 17,955.82.

Currencies: Oil, gold down

Crude prices dropped with light, sweet crude for August delivery settling down 61USc, or 0.8%, at $US76.01 a barrel in New York, ending the week down 8USc despite rising as high as $US78.15 a barrel on Wednesday.

Brent crude on the ICE futures exchange fell 72UScents, or 1%, at $75.37 a barrel.

Gold futures slid to eight-week lows as strength in the euro and weak economic sentiment reduced demand.

The most actively traded contract, for August delivery, settled down $US20.10, or 1.7%, at $US1188.20 an ounce in New York, the lowest settlement price since May 21.

Currencies: Dollar down, yen up

The dollar dropped as much as 1% against the Japanese yen and remained lower versus the euro, which slipped after touching the $US1.30 level.

As equities fell, investors shifting out of riskier assets and into a safer haven were choosing yen, pushing it to some of the best levels seen since November.

The dollar fell to ¥86.57 from ¥87.40 on Thursday. The dollar fell as low as ¥86.24 intraday, not far from the low in November of ¥86.15. The all-time low in 1995 was around ¥81.

The euro rose just above $US1.30 and traded at $US1.2942 compared with $US1.2906 late on Thursday.

The UK pound extended losses to fall to $US1.5302 from $US1.5410 late on Thursday.

From last week, the dollar has lost 2% against the yen for its fifth weekly decline in the past six weeks. The greenback is down 1.5% versus the UK pound.