Twenty five years ago , the Dow Jones Industrial Average cratered 508 points in what still remains its worst percentage-loss in its history.
Things weren't quite as horrendous Friday for the broad-based S&P 500 , but the index did manage to turn in its worst single-day performance in four months, down 24.15 points (-1.66%), to end at 1,433.19.
Dismal earnings reports were the name of the game today, with multiple Dow and S&P 500 components failing to live up to lofty expectations.
Possibly the biggest busts of the day came from the restaurant sector, as McDonald's (NYSE: MCD) and Chipotle Mexican Grill (NYSE: CMG) served up a heaping pile of indigestion for shareholders.
McDonald's reported a 4% decline in overall operating income, as revenue decreased 0.4% on higher costs and weak comparable-store sales. Europe's debt crisis and food inflation costs have finally caught up with the golden arches. On a branding level, no other restaurant can compete with McDonald's, but the premium valuation it receives could still lend to more possible downside in the stock. Shares ended down 4.4% on the news.
Microsoft's (Nasdaq: MSFT) shares lost 3.1% after the company reported disappointing third-quarter earnings. Sales fell 7.8% to $16 billion, and earnings per share of $0.53 were $0.03 short of estimates. Microsoft is about to launch Windows 8, as well as a new tablet built on the mobile version of the operating system, and sales suffered as IT departments and consumers put off spending until the upgrade is released.
Don't panic
So much for the new bull market? Maybe, maybe not.
The important thing to remember on big down days like these is not to panic.
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The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
