January 20, 2010 / 4:06 PM / 8 years ago

US STOCKS-Wall St falls on bank results, IBM forecast

* Morgan Stanley results miss estimate

* IBM slides on Wall Street concerns

* Indexes off: Dow 1.6 pct, S&P 500 1.4 pct, Nasdaq 1.7

* For up-to-the-minute market news, click [STXNEWS/US]

By Chuck Mikolajczak

NEW YORK, Jan 20 (Reuters) - U.S. stocks fell on Wednesday as quarterly results from three big U.S. banks raised concerns about the stability of the sector and analysts questioned IBM’s profit forecast.

Morgan Stanley (MS.N) shed 1.1 percent to $30.81 after the company’s quarterly profit missed expectations after accounting charges. For details, see [ID:nN19222799]

But Bank of America Corp (BAC.N) added 0.6 percent to $16.41 as it said credit problems are beginning to stabilize but posted a wider-than-expected quarterly loss.[ID:nN19230402] The S&P Financial index .GSPF dropped 0.7 percent.

International Business Machines Corp (IBM.N) fell 3.3 percent to $129.76 after at least three brokerages said its profit outlook is conservative and suggested a slowdown in earnings growth. IBM reporting stronger-than-expected quarterly profit on Tuesday. [ID:nN19218960] [ID:nSGE60J0I7]

“The problem, with IBM as an example, is (the stock) ran up into this (earnings) report, so it’s buy the sizzle and sell the steak,” said Terry Morris, senior vice president and senior equity manager for National Penn Investors Trust Co in Reading, Pennsylvania.

The Dow Jones industrial average .DJI dropped 168.23 points, or 1.57 percent, to 10,557.20. The Standard & Poor’s 500 Index .SPX fell 15.65 points, or 1.36 percent, to 1,134.58. The Nasdaq Composite Index .IXIC lost 39.96 points, or 1.72 percent, to 2,280.44.

The S&P 500 has has seen an advance or decline of at least 1 percent in each of the last three sessions.

Wells Fargo & Co (WFC.N) dipped 0.6 percent to $28.12 after the bank swung to a quarterly profit but loan losses increased. [ID:nN19206374]

In macroeconomic news, the government said December U.S. producer prices rose for a third straight month, increasing by 0.2 percent on a surge in food prices.

Housing starts in December fell unexpectedly, weighed down by a drop in construction activity for single-family dwellings, but new building permits rose 10.9 percent last month, according to Commerce Department data. [ID:nN20132291] (Editing by Jeffrey Benkoe)

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