Wall Street falls on weak earnings, economic anxiety

NEW YORK (Reuters) - Stocks fell on Friday, pressured by weak corporate earnings and concerns over companies' outlooks for the rest of the year as the global economic slowdown showed no signs of letting up.

Bellwether General Electric posted a quarterly profit that met expectations but warned of an "extremely difficult" 2009, feeding investor concerns about the uncertainty of the economic outlook and the impact on corporate profits.

The Dow component was down more than 7 percent at $12.52.

"I don't think anybody should be surprised that every company is going to talk about a difficult year going forward," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.

"Everybody's guessing at this point in terms of the economic conditions and how that is going to impact their company."

Financial shares also were weighed down by continued jitters over the health of the sector and the possibility banks will have to raise more capital to weather the storm. The S&P financial index <.GSPF> fell 2.4 percent.

The Dow Jones industrial average <.DJI> was down 139.06 points, or 1.71 percent, at 7,983.74. The Standard & Poor's 500 Index <.SPX> fell 9.52 points, or 1.15 percent, to 817.98. The Nasdaq Composite Index <.IXIC> lost 4.88 points, or 0.33 percent, to 1,460.61.

Among the Dow's biggest drags was Caterpillar , which fell 3.8 percent to $35.83 after rival Komatsu Ltd <6301.T> chopped its profit forecast for this year, citing a sharp fall in global demand.

On the broader economic front, European business surveys showed companies there were bogged down in recessionary territory, while British data confirmed the economy had gone into recession for the first time since 1991.

With the U.S. corporate earnings season in full swing, among Friday's results was a report from Harley-Davidson , who said it would close plants and cut 1,100 jobs, while its earnings missed expectations. Shares of the motorcycle maker were down 10.7 percent at $11.07.

The earnings season so far has been a weak one, as expected, with companies announcing a slew of job cuts and giving a grim outlook for the year ahead as they grapple with the fallout from the credit crunch and ensuing year-long U.S. recession.

But there have been some bright spots, particularly in the tech sector. Among them, Internet leader Google Inc reported earnings that beat Wall Street's estimates, making it one of the biggest boosts on the Nasdaq. The stock rose 3.6 percent to $317.31.

Uncertainty over whether there will be a struggle over confirming Treasury secretary nominee Timothy Geithner in the Senate added to the negative sentiment, Ghriskey said. Geithner was backed by a Senate Committee on Thursday and Senate Majority Leader Harry Reid said he hoped to hold a confirmation vote on Monday.

"Everybody's waiting for the Geithner confirmation, if it occurs, and are they ready to act?" said Ghriskey.

"Do they have a plan and what is that plan or are we going to be treading water here for a while longer?"

(Editing by Chizu Nomiyama)

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