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Stocks sink again on Obama's pushback on banks

The stock market suffered its worst setback in more than 10 months as investors rejected President Barack Obama's plans to restrict big banks and earnings reports that just weren't good enough.

world Updated: Jan 23, 2010 10:48 IST

The stock market suffered its worst setback in more than 10 months as investors rejected President Barack Obama's plans to restrict big banks and earnings reports that just weren't good enough.

The Dow Jones industrial average had its fourth big drop in five trading days on Friday, sliding 217 points. Over the past three days, the Dow lost 552 points, or 5.2 per cent, and over the past five days, it fell 537 points, after gaining 115 points on Tuesday.

It was the worst showing for the market since it began its recovery last March. The Dow lost 4.1 per cent this week, its worst week since it hit a 12-year low in March.

All the major indicators fell more than 2 per cent on Friday.

Investors are finding uncertainty and bad news wherever they look. Even before Obama announced his plan on Thursday, they were selling stocks on disappointing earnings and concerns that a possible slowdown in China's economy might spread. The mood in the market was dark enough that upbeat earnings on Friday from General Electric Co. and McDonald's Corp weren't enough to sway investors.

The problem with earnings reports is that they're not meeting investors' high expectations. Tech stocks were among the big losers on Friday after Google Inc's fourth-quarter revenue didn't meet forecasts, and after a Citigroup analyst lowered his rating on seven chip makers.