Wall Street slumps, hit by weak earnings, China

(Reuters) - Wall Street opened sharply lower on Friday, with the major indexes falling one percent or more, on investor concerns over a clampdown on margin trading in China and a number of disappointing earnings reports from U.S. corporations.

Shares of Honeywell International shares dropped 2 percent to $101.53 after the manufacturer of aircraft climate control systems blamed a strong dollar for a 5 percent fall in revenue.

American Express , the world's largest credit card issuer, was down 5 percent to $76.85 after it reported quarterly revenue that fell short of analysts' estimates, hurt by a stronger dollar and the loss of several co-branded tie-ups.

"Eventually people have to say, 'Ok, forget about the Fed and central bankers nonsense and focus on the fundamentals,' because if the large-caps are coming in with lower-than-expected earnings, then you know that other smaller companies will be in trouble," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

U.S. futures had already dropped after Chinese authorities lifted restrictions on short-selling while also warning against excessive borrowing on margin, two developments that could pressure that market.

China H-Share index futures fell 3.3 percent. Global equities lost ground as the weakness in China carried through to European markets and then into the U.S.

"The restrictions on short selling have been lifted in China and when one market sneezes, the rest of them usually react," said Saluzzi.

Also a concern for market participants was that Greece could leave the euro zone as it tries to reform its economy and deal with heavy debt.

The Dow Jones industrial average <.DJI> fell 247.97 points, or 1.37 percent, to 17,857.8, the S&P 500 <.SPX> lost 20.25 points, or 0.96 percent, to 2,084.74 and the Nasdaq Composite <.IXIC> dropped 60.43 points, or 1.21 percent, to 4,947.36.

The U.S. quarterly earnings season has been mixed so far with companies beating lowered expectations.

Shares of General Electric fell 0.9 percent to $27.55 after the company's revenue fell, hurt by the strong dollar. Results were also weighed by $16 billion in charges tied to its divestment of GE Capital assets.

Shares of Advanced Micro Devices were down 12.5 percent at $2.51 after the chipmaker posted a bigger loss and said it expected weak demand for personal computers to continue for some time.

Declining issues outnumbered advancing ones on the NYSE by 2,304 to 448, for a 5.14-to-1 ratio; on the Nasdaq, 1,995 issues fell and 389 advanced for a 5.13-to-1 ratio favoring decliners.

The benchmark S&P 500 index posted 1 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 18 new highs and 16 new lows.

(Editing by Bernadette Baum)

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