U.S. Stocks Fall As Bank Of America Results Disappoint

NEW YORK (MarketWatch) -- Bank of America Corp.'s larger-than-expected profit drop and a rise in weekly jobless claims sparked a decline in U.S. stocks Thursday, with the disappointing results reported by the country's second-biggest bank serving as another example of ongoing trouble in the financial sector.

The Dow Jones Industrial Average fell 22.1 points in early trades to 13,871.5, with 17 of its 30 components trading lower. American Express Co. led the Dow's decline, its stock off 1.5%.

The S&P 500 dropped 4.14 points to 1,537.10, while the Nasdaq Composite declined 10.94 points to 2,781.73.

Investors offered little reaction to a 0.3% rebound in U.S. leading indictors in September, with the Conference Board's measure of future economic growth looking largely as expected. .

On the New York Stock Exchange, volume hit 350 million shares, and declining stocks surpassed advancing issues by a ratio of 3 to 2. Nearly 595 million shares traded hands on the Nasdaq, where decliners topped advancers 3 to 2.

Earlier Thursday, the Labor Department had reported an increase of 28,000 in the number of those seeking new jobless claims, bringing the count to 337,000 last week. .

"Though the data may have been impacted somewhat by the Columbus Day holiday, the numbers are nevertheless worse than expected and will play into the hands of bond bulls, who see significant economic weakness ahead," said analysts at Action Economics.

Treasury prices rallied, with the 10-year note rising 10/32 to 101 27/32, as the benchmark's yield fell to 4.517%.

In currencies, the dollar weakened sank to new historic lows against the euro, with the dollar index down 0.7% to 77.610. .

In energy, crude-oil futures headed higher but remained below the previous session's record $89 mark. Crude for November delivery was recently up $1.03 at $88.43 a barrel. .

And in other commodities action, the December gold contract climbed $5.50 to $767.80 an ounce.

In an echo of disappointments from other financial institutions this week including Citigroup Inc. , Bank of America reported before the bell a third-quarter decline in net profit of 32%.

Pfizer Inc. the world's largest drug manufacturer topped Wall Street expectations, despite reporting a bottom-line drop. .

Pfizer shares were up 0.9%.

After the session, Google Inc. is scheduled to release its results, with Wall Street looking for solid profit and revenue growth from the Internet search giant. .

Google shares fell 0.3%.

On Wednesday, Wall Street closed mixed after surging oil prices quashed an early rally, although the technology-laden Nasdaq Composite retained gains amid well-received earnings from Intel Corp. , among others.

By Kate Gibson