Wall Street falls sharply at opening.

Wall Street slides sharply Friday morning as investors continue to worry about economy.

Wall Street fell sharply early Friday, with the Dow Jones industrials reaching new six-year lows as investors around the world keep selling on pessimism about the global economy. Financial stocks led the market lower.
Disappointing fourth-quarter earnings reports from Lowe's and J.C. Penney provided new evidence that the recession is taking a heavy toll on U.S. businesses. The pair also forecast 2009 earnings below analysts' expectations.

The reports came as investors are increasingly worried about the weakening banking industry and what the government is doing to stabilize it.

The Dow tumbled 131.10, or 1.76 percent, to 7,334.85. On Thursday, the Dow fell to its lowest level since Oct. 9, 2002, the depths of the last bear market.

The Standard & Poor's 500 index tumbled 14.05, or 1.80 percent, Friday to 764.89, while the Nasdaq composite index fell 16.14, or 1.12 percent, to 1,426.68.

Key financial stocks including Citigroup Inc. and Bank of America Corp. were falling again after being battered Thursday. Both Citi and Bank of America have been among the hardest hit by the ongoing turmoil in the industry and received multiple multibillion investments from the government to help stabilize their operations.

Citi shares tumbled 52 cents, or 20.9 percent, to $1.99. Bank of America shares sank 72 cents, or 18.3 percent, to $3.21.

"There's perceived disappointment from the lack of clarity from the Treasury (Department) for what it will do with the financial sector," said Wasif Latif, portfolio manager at USAA Investment Management Co. "That's hitting financials regularly."

Stocks have fallen steadily over the past two weeks as investors lost confidence in multiple Obama administration programs aimed at bolstering the economy. The market's inability to rally signals that investors don't have a sense of when the recession, already 14 months old, will end.

"We're going through a tug of war between optimism and pessimism," Latif said. "When there is a lack of clarity, it becomes more of an emotional or psychological environment. The mood can sway on any given day based on the flow of news coming out."

Friday's sell-off followed steep drops overseas. Japan's Nikkei stock average fell 1.87 percent and Hong Kong's Hang Seng fell 2.49 percent. In afternoon trading, Britain's FTSE 100 declined 3.09 percent, Germany's DAX index tumbled 4.08 percent, and France's CAC-40 fell 3.50 percent.

Investors received further evidence of the sagging economy as home improvement retailer Lowe's said its fourth-quarter profit dropped 60 percent after customers cut back on spending. Lowe's also provided a 2009 earnings forecast that was short of analysts' expectations.

Department store chain J.C. Penney said its fourth-quarter profit tumbled 51 percent, but beat analysts' expectations. However, J.C. Penney forecast a first-quarter loss greater than what analysts are forecasting.

Shares of Lowe's fell 42 cents, or 2.5 percent, to $16.56. J.C. Penney shares declined 33 cents, or 2.2 percent, to $14.59.


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