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Wall Street slides in early trading after AIG, Dell earnings disappoint investors

Wall Street slides in early trading after AIG, Dell earnings disappoint investors

Stocks fell in early trading Friday after disappointing earnings from American International Group Inc. and Dell Inc. underscored the challenging economic environment in which companies now operate. The Dow Jones industrial average fell more than 130 points, or 1 percent.
A government report that personal spending, on an inflation-adjusted basis, was unchanged in January provided further evidence of a consumer pullback that's likely to weaken the economy further.
There also was nervousness about what impact the recent slide in the dollar and robust rally in commodities _ including a jump in crude oil prices to $103 a barrel _ will have on the economy and companies.
Over all, stocks have performed better in February than in January, when credit market turmoil took a heavy toll on the major averages. But disappointing earnings results released late Thursday could cast a pall over the market and cause stocks to end the month on a wary note.
Insurer AIG announced a $5.29 billion (euro3.49 billion) quarterly loss and took a massive charge to account for its exposure to credit derivatives. The loss caught analysts off guard, as many had expected the company to report a profit.
Computer maker Dell had a 6 percent decline in quarterly profit and warned that its business could suffer from reduced customer spending. The company's most recent earnings failed to meet analysts' expectations.
In the first minutes of trading, the Dow fell 134.98, or 1.07 percent, to 12,447.20.
Broader stock indicators also fell. The Standard & Poor's 500 index dropped 14.93, or 1.09 percent, to 1,352.75, and the Nasdaq composite index dipped 21.83, or 0.94 percent, to 2,309.74.
Bond prices rose sharply as stocks declined. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.59 percent from 3.67 percent late Thursday.