NEW YORK (Reuters) – Stocks dropped on Friday, snapping a four-day winning streak, after news reports that Standard & Poor's would downgrade credit ratings on several euro-zone countries.

The ratings agency was reportedly set to downgrade euro-zone countries, including France and Austria, but leave the ratings of Germany and the Netherlands unchanged. French Finance Minister Francois Baroin said the country has been notified of a one-notch cut.

After the market's close, S&P followed through with downgrades of France and Austria as well as seven other members of the 17-nation euro zone bloc.

"This is going to destabilize a lot of those funding packages because they are all based on the AAA rating, and now you are going to have AA+ for France and Austria, and maybe down two notches for Italy," said Alan Valdes, director of floor operations for DME Securities in New York.

Friday's slide came as investors' focus shifted back to the euro zone's debt crisis.

In recent days, the S&P 500 had reached five-month highs on the back of solid U.S. economic data. The tight relationship between U.S. stocks and the euro has broken down in recent weeks, a sign investors have placed less emphasis on the euro zone's woes.

The Friday selloff shows Europe's debt problems can still make U.S. investors skittish. However, it is notable that the major U.S. stock indexes finished well off the day's lows.

Banks led the decline, as the impending downgrades and lackluster earnings from JPMorgan Chase & Co (JPM.N) drove those shares lower. The S&P financial index (.GSPF) fell 0.8 percent, making it the worst performer of the 10 major S&P sectors.

The Dow Jones industrial average (.DJI) dropped 48.96 points, or 0.39 percent, to 12,422.06 at the close. The Standard & Poor's 500 Index (.SPX) lost 6.41 points, or 0.49 percent, to 1,289.09. The Nasdaq Composite Index (.IXIC) fell 14.03 points, or 0.51 percent, to 2,710.67.

For the week, the Dow rose 0.5 percent, while the S&P 500 advanced 0.9 percent, and the Nasdaq gained 1.4 percent.

Investors will look to earnings next week for insight on how the euro zone's debt woes may affect profits. <.N/O>

"If you get a weak recession or deep recession in Europe, it is going to hurt our companies and bring our market right back down," Valdes said.

JPMorgan Chase slid 2.5 percent to $35.92 after the bank said fourth-quarter profit fell as the European debt crisis weighed on trading and corporate deal-making. Chief Executive Jamie Dimon expressed renewed concerns about the euro-zone debt crisis.

The KBW index of bank stocks (.BKX) slipped 0.4 percent, following a streak of gains. The index was still up more than 10 percent for the year.

Bank of America (BAC.N) shares fell 2.7 percent to $6.61. Goldman Sachs (GS.N) lost 2.2 percent to $98.96.

Volume was light with about 6.39 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below the daily average of 6.68 billion.

Declining stocks outnumbered advancing ones on the NYSE by 1,941 to 1,036, while on the Nasdaq, decliners beat advancers 1,666 to 804.

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)

DES MOINES, Iowa – Insurer AIG on Thursday posted a steeper third-quarter loss, undercut by declining interest rates and weak stock markets that reduced the value of its holdings while it paid out storm losses. It also took a big one-time charge for a fleet of older less fuel-efficient aircraft.

New York-based American International Group Inc. reported a loss of $4.1 billion, or $2.16 per share, compared with a loss of $2.52 billion, or $18.53 per share a year ago.

The operating loss was $3.04 billion, or $1.60 per share, up from a loss of $114 million, or 84 cents a year ago.

Analysts surveyed by FactSet expected a loss of 22 cents per share.

The company has been paying back the billions of dollars the U.S. government provided in the 2008 bailout and now owes roughly $68 billion.

At AIG’s Chartis Insurance unit, net premiums written rose less than 1 percent to $8.66 billion from $8.59 billion while claims expenses rose nearly 12 percent to $6.84 billion. Underwriting expenses climbed 15 percent to $2.89 billion. That left the company with an underwriting loss of $582 million, compared with a profit of $65 million a year ago. Its combined ratio was 106.4 compared with 99.3 a year ago.

Combined ratio is the sum of an insurance company’s loss ratio and expense ratio and is used as an indicator of profitability. A ratio above 100 means that for every premium dollar taken in, more than a dollar went for losses, expenses, and commissions. A figure below 100 indicates an underwriting profit.

The business posted catastrophe losses of $574 million up from $72 million of losses taken a year ago. Much of the current quarter’s loss was from Hurricane Irene, which struck the East Coast in August.

“Despite the difficult external environment, we are encouraged by the progress we’ve made and the underlying strength of our core insurance businesses,” CEO Robert H. Benmosche said in a statement.

In the SunAmerican Financial business, revenue fell 10 percent to $3.54 billion on lower premiums and investment income. Expenses rose 7 percent.

The company also took a $1.5 billion non-cash charge for aircraft in its International Lease Finance Corp. fleet. The charge is for older-generation planes that would be sold prior to the end of their previously estimated life.

The company said a declining stock market contributed to a loss of $2.3 billion in the valuation of its holding of AIA Group Ltd. shares.

Reduced interest rates and widening credit spreads cut the fair value of other holdings by more than $974 million.

AIG also paid the U.S. Treasury $2.2 billion in August, using proceeds from its sale of Nan Shan Life Insurance Co.

On Monday, AIG made an additional payment of approximately $972 million, primarily from the release of funds held in escrow related to the American Life Insurance Co.

The latest repayment brings the insurance giant’s outstanding balance from the 2008 taxpayer-funded bailout down to roughly $68 billion.

The government provided AIG with $182 billion at the height of the 2008 financial crisis.

The government still owns 77 percent of AIG’s common stock. While the government made an initial sale of AIG stock last May, the expectation is that those stock sales will not resume until the value of AIG shares increase in value. AIG stock has lost nearly half of its value this year.

Shares rose 44 cents, or 1.8 percent, to close at $24.63 before the company posted results. That is below the $28.72 price where the Treasury would be able to recoup all of its investment in AIG.

Shares fell another 18 cents in after-market trading. They are trading at nearly half their value at the beginning of the year. They’ve traded as high as $52.67 in the past 52 weeks.

AIG also said its board authorized the repurchase stock valued at up to $1 billion. The timing of purchases will depend on market conditions, AIG’s financial condition, results of operations, liquidity and other factors.

NEW YORK – Stocks are mixed in midday trading as investors weigh stronger earnings from Boeing and Corning with uncertainty about the outcome of a key meeting among European leaders.

European officials will meet later in the day to discuss how to contain the region’s debt crisis. European indexes turned lower ahead of the meeting on doubts that an agreement will be reached.

Boeing rose 4 percent after it reported a bigger profit last quarter than analysts were expecting. Amazon slumped 11 percent after reporting a 73 percent drop in income.

The Dow Jones industrial average was up 66 points, or 0.6 percent, to 11,774 at 11:45 Eastern. The S&P 500 was up 3, or 0.2 percent, to 1,232. The Nasdaq composite was down 7, or 0.3 percent, to 2,632.

NEW YORK – U.S. stock futures are rising modestly ahead of reports on consumer confidence, home prices and corporate earnings.

Strong earnings growth has helped the S&P 500 rise 11.6 percent since Oct. 4, and more companies on Tuesday reported gains above analysts’ expectations. DuPont, Coach Inc. and U.S. Steel reported stronger results.

Economists expect a report later Tuesday to show that Americans’ confidence in the economy is still weak. Consumer confidence is near where it was in the spring of 2009. But retail sales still grew in September at their strongest pace in seven months.

About 90 minutes ahead of the opening of trading, Dow Jones industrial average futures are up 21, or 0.2 percent, to 11,846. S&P 500 futures are up 4.20, or 0.3 percent, to 1,251.30. Nasdaq 100 futures are up 7.25, or 0.3 percent, to 2,382.

BANGKOK – Asian stocks markets jumped Monday, buoyed by positive export figures from Japan that point toward a recovery from a devastating tsunami earlier this year.

Japan’s Nikkei 225 index rose 1.4 percent to 8,798.81, Hong Kong’s Hang Seng soared 3 percent to 18,572.70 and South Korea’s Kospi added 2.3 percent to 1,880.55. Benchmarks in Singapore, Taiwan, Australia and Indonesia were also higher.

Japan’s Finance Ministry said early Monday that exports rose 2.4 percent in September compared with a year earlier, marking the second consecutive month of growth.

The rise follows a five-month decline in the wake of the March 11 earthquake and tsunami that devastated northeast Japan.

Enthusiasm for stock markets is on the upswing amid some positive third-quarter earnings reports from U.S. companies, which come despite a weak economy. Among S&P 500 companies reporting so far, seven out of ten have posted higher profits than expected.

Still, investors are haunted by fear of another economic slowdown.

Europe is struggling to contain a debt crisis that has hobbled Greece’s economy and threatens to drag larger economies — as well as the region’s banks — into financial havoc. A Greek default could set off another global financial panic and tip the already fragile U.S. economy into recession.

European leaders are to meet Wednesday to hammer out a concrete resolution to the crisis, including ways to fortify the euro 440 billion ($600 billion) bailout fund to help prevent larger economies that use the euro common currency, such as Italy, from being dragged into the crisis.

Weeks of intensive discussions by European leaders on the crisis have so far failed to produce a decisive resolution.

“Markets will remain nervous ahead of Wednesday’s EU summit, hoping that officials can settle their differences and emerge with a concrete solution. In this respect, the risk of disappointment is high,” Credit Agricole CIB said in a research note.

Benchmark oil for November delivery was up 18 cents to $87.57 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.33 to finish at $87.40 per barrel on the Nymex on Friday.

In currencies, the euro rose to $1.3875 from $1.3864 Friday in New York. The dollar rose to 76.26 yen from 76.12 yen.

NEW YORK – Stocks slid Thursday after reports that a meeting planned for the weekend between European leaders to fend off a credit crisis may be delayed. The news overshadowed an unexpected recovery in manufacturing in the Northeast.

The Dow Jones industrial average was down 65 points, or 0.6 percent, at 11,439 at noon. Eastern.

Investors are concerned that differences between the leaders of Germany and France may hold up an agreement on how to protect European banks from the likelihood of a default by the Greek government.

Officials from the 17 countries that share the euro are scheduled to meet at a summit this Sunday to discuss ways to contain the damage. A messy default by Greece could to huge losses for European banks that hold Greek bonds. If that leads them to pull back on lending to each other, investors fear it could cause another freeze in global credit markets like the one in late 2008 after Lehman Brothers collapsed.

The S&P 500 fell 7, or 0.6 percent, to 1,202. The Nasdaq lost 32, or 1.2 percent, to 2,572.

The dollar and U.S. Treasury prices rose as investors shifted money into assets perceived as being relatively safe. The yield on the 10-year Treasury note fell to 2.12 percent.

U.S. indexes had edged higher in early trading after the Federal Reserve Bank of Philadelphia said regional manufacturing was “showing signs of recovery.” Its index of manufacturing, shipments and new orders was far better than economists had forecast.

Other economic reports were mixed. The Labor Department said new applications for unemployment benefits dropped to 403,000 last week, a sign that layoffs are easing. On the down side, sales of previously-occupied homes fell 3 percent last month.

Several large companies reported earnings before the market opened. Union Pacific Corp., the nation’s largest railroad, surged after its earnings came in well ahead of analysts’ estimates. The company gained 5.3 percent after reporting that its income jumped 16 percent, more than analysts had forecast. It also said it expects the growth to continue. .

Southwest Airlines rose 3.2 percent after reporting income that was a penny per share higher than analysts predicted. AT&T Inc. lost 1 percent after reporting that the number of new iPhones activated last quarter was the lowest in a year and a half.

The New York Times jumped 4 percent after the company reported higher profits than expected.

Microsoft Corp. will report earnings after the market closes.

NEW YORK – Stocks are closing sharply higher on reports that Germany and France are moving closer to resolving the European debt crisis.

The Guardian newspaper reported Tuesday that France and Germany have agreed to expand a rescue fund. European officials are expected to take up the expansion along with other measures at a meeting this weekend.

The Dow Jones industrial average rose 180 points, or 1.6 percent, to close at 11,577.

The S&P 500 index rose 25 points, or 2 percent, to 1,225. Bank stocks were among the strongest performers.

The Nasdaq composite rose 43 points, or 1.6 percent, to 2,657.

More than five stocks rose for every one that fell on the New York Stock Exchange. Trading volume was higher than average at 4.9 billion shares.

NEW YORK – Stocks rose modestly Wednesday after companies reported higher earnings but gave mixed forecasts about how the fragile economy and rising costs will affect their growth.

Target Corp., Staples Inc. and Dell Inc. reported earnings for last quarter that were above analysts’ forecasts. Companies in the Standard & Poor’s 500 are on track to report higher profits for a ninth straight quarter. But economic growth is weak around the world, and some economists worry that a second recession may be coming. That could hurt companies’ earnings in the future — and kept investors from buying with more enthusiasm Wednesday.

Dell’s forecast added to investors’ concerns: It cut its prediction for revenue growth this year. Target and Staples gave profit forecasts that were above Wall Street’s expectations.

The Dow Jones industrial average rose 4.28 points to 11,410.21. The S&P 500 rose 1.13, or 0.1 percent, to 1,193.89. The Nasdaq composite fell 11.97, or 0.5 percent, to 2,511.48.

Seven of the 10 sectors that make up the S&P 500 rose. The biggest drops came from technology stocks, which fell 0.8 percent after Dell cut its forecast.

“There are a whole bunch of contradictory signals in the system now, and it’s hard to tell which way to go,” said Charlie Smith, chief investment officer of Fort Pitt Capital Group, which has just over $1 billion in assets under management.

Investors are still worried about Europe. Some countries have borrowed so much that they may not be able to repay their bonds, and economic growth there has slowed. Concerns about a possible default by a European country have dominated the market in recent weeks, along with worries about the slow U.S. economy.

Another concern Wednesday: Companies are contending with rising costs. Higher food prices helped push inflation at the wholesale level to 0.2 percent in July, according to a government report Wednesday. That compares with a 0.4 percent drop in June, but is still well below inflation levels earlier this year when violence in the Middle East forced oil prices higher. In February, wholesale prices rose 1.5 percent.

Economists say rising inflation reduces the chances that the Federal Reserve could announce another round of bond purchases to help the economy, a move called quantitative easing. The Fed just ended its second round of purchases, known as QE2, in June. “QE3 could be a hard sell” given higher inflation, Credit Suisse economists wrote in a report. They expect the government on Thursday to report that consumer prices rose 0.2 percent in July.

Preppy retailer Abercrombie & Fitch Co. fell 8.7 percent after its CEO warned of challenges ahead — including higher expenses. Cost “pressures will be greater in the second half of the year, and macroeconomic uncertainty has increased,” Mike Jeffries said, after the company reported a 64 percent rise in profit last quarter.

Dell said late Tuesday its profit rose 63 percent last quarter on strong demand from businesses and government agencies. But it also cited “a more uncertain demand environment” when it cut its forecast for annual revenue growth to a range of 1 percent to 5 percent. That’s down from an earlier growth forecast for 5 percent to 9 percent. Dell stock fell 10.1 percent Wednesday.

Other companies are more optimistic. Retailer Target said it expects to earn between $4.15 and $4.30 per share this year. Analysts expected $4.14. Target also said its earnings last quarter rose 3.7 percent on sales of grocery, beauty products and other items. Target stock rose 2.4 percent.

Office products retailer Staples raised its profit forecast for the year after saying strong international sales pushed earnings up 36 percent last quarter.

Deere also raised its forecast for full-year earnings. It now expects to earn $2.7 billion this fiscal year, up from a May forecast of $2.65 billion. The maker of tractors and other heavy equipment said its profit rose 15 percent last quarter on strong demand for farm equipment.

Stocks have been particularly volatile in August. Worries rose as the U.S. government said it may default on its debt unless it was allowed to borrow more. The government just beat the deadline to avoid a default, but the partisanship in the debate came at a cost — Standard & Poor’s downgraded the U.S. credit rating on Aug. 5 by one notch to AA+ from the top AAA rating. That triggered one of Wall Street’s wildest weeks: The Dow rose or fell by at least 400 points in each of the first four days of last week, the first time that has happened.

Markets appear to have calmed somewhat since then. Tuesday marked the first time since the Aug. 5 downgrade that the Dow rose or fell by less than 100 points. It fell 76 points on worries about Europe’s ability to contain its debt problems.

Nearly three stocks rose Wednesday for every two that fell on the New York Stock Exchange. Consolidated trading volume was relatively light at 3.9 billion shares, the lowest in three weeks.

NEW YORK – U.S. stocks fluctuated Wednesday after companies reported strong earnings but gave mixed forecasts for the future.

Target Corp., Staples Inc. and Dell Inc. all reported earnings for last quarter that were above analysts’ forecasts. Companies in the Standard & Poor’s 500 are on track to report higher profits for a ninth straight quarter. But economic growth is weak around the world, and some economists worry that a second recession may be coming. That could pull down future results.

Target and Staples both gave profit forecasts that were above Wall Street’s expectations, but Dell cut its prediction for revenue growth this year.

The Dow Jones industrial average rose 6 points, or 0.1 percent, to 11,412 at noon in New York. It had been up as many as 120 around 10:30 a.m. The S&P 500 rose 1, or 0.1 percent, to 1,194. The Nasdaq composite fell 17, or 0.7 percent, to 2,506.

Seven of the 10 sectors that make up the S&P 500 rose. Three fell, led by a 0.9 percent drop for technology stocks after Dell’s forecast cut.

“There are a whole bunch of contradictory signals in the system now, and it’s hard to tell which way to go,” said Charlie Smith, chief investment officer of Fort Pitt Capital Group, which has just over $1 billion in assets under management.

The increased role of automated trading by computers has increased volatility, making investing more difficult. “When you get a piece of news, it’s almost like the machines are trying to out-quick each other,” and they are sending stocks in straight lines up or down, Smith said. “That’s what really scares retail investors. We try to sit and wait in the weeds for good businesses at good prices.”

He has focused on telecom stocks and cable companies. Their relatively big dividend yields look more attractive given low yields on bonds. The yield on the 10-year Treasury note is at 2.22 percent, down from 3.34 percent at the start of the year.

Telecom stocks in the S&P 500 rose 1.5 percent Wednesday, the most among the sectors that make up the index.

Dell said late Tuesday its profit rose 63 percent last quarter on strong demand from businesses and government agencies. But it also cited “a more uncertain demand environment” when it cut its forecast for annual revenue growth to a range of 1 percent to 5 percent. That’s down from an earlier growth forecast for 5 percent to 9 percent. Dell stock fell 9.7 percent Wednesday.

Other companies are more optimistic. Retailer Target said it expects to earn between $4.15 per share and $4.30 per share this year. Analysts had expected $4.14 per share, according to FactSet. Target also said its earnings last quarter rose 2.1 percent on grocery sales. Target shares rose 2.1 percent.

Office products retailer Staples raised its profit forecast for the year after saying strong international sales pushed earnings up 36 percent last quarter.

Deere also raised its forecast for full-year earnings. It now expects to earn $2.7 billion this fiscal year, up from a May forecast of $2.65 billion. The maker of tractors and other heavy equipment said its profit rose 15 percent last quarter on strong demand for farm equipment.

Companies are making more money, but many have done so by raising prices to offset higher costs. Higher food prices helped push inflation at the wholesale level to 0.2 percent in July, according to a government report Wednesday. But that is still well below inflation levels earlier this year when oil prices were spiking because of violence in the Middle East. In February, wholesale inflation was 1.4 percent.

Stocks have been particularly volatile in August. Worries rose as the U.S. government said it may default on its debt unless it was allowed to borrow more. The government just beat the deadline to avoid a default, but the partisanship in the debate came at a cost — Standard & Poor’s downgraded the U.S. credit rating on Aug. 5 by one notch to AA+ from the top AAA rating. That triggered one of Wall Street’s wildest weeks: The Dow rose or fell by at least 400 points in each of the first four days of last week, the first time that has happened.

Markets appear to have calmed somewhat since then. Tuesday marked the first time since the Aug. 5 downgrade that the Dow rose or fell by less than 100 points. It fell 76 points on worries about Europe’s ability to contain its debt problems. Some European countries have borrowed so much that investors fear they won’t be able to repay their debts. The Dow had been down as many as 190 points earlier Tuesday.

NEW YORK (Reuters) – Stocks rose to a session high on Thursday after reports the White House and House Speaker John Boehner were close to a budget agreement. Both the White House and Boehner denied a deal was close to being reached, and stocks pared gains.

The Dow Jones industrial average (.DJI) was up 163.70 points, or 1.30 percent, at 12,735.61. The Standard & Poor’s 500 Index (.SPX) was up 18.75 points, or 1.41 percent, at 1,344.59. The Nasdaq Composite Index (.IXIC) was up 22.56 points, or 0.80 percent, at 2,836.79.