Investors were disappointed by General Electric Co.'s fourth-quarter results. While results met Wall Street's lowered expectations, investors were still uneasy over a 46 percent drop in earnings. The stock fell 4 percent.
Copier and printer maker Xerox Corp. posted a profit of $1 million. Excluding one-time charges, Xerox fell short of analysts expectations because of weakening sales. Xerox fell 11 percent.
Capital One Financial Corp. tumbled 17 percent after it became the latest financial firm to report weak results. The financial services firm, which is primarily focused on credit card lending, late Thursday reported a fourth-quarter loss as it set aside $2.1 billion to cover defaulting loans. Analysts were expecting the company to post a profit.
The economic slowdown continues to wear on economies worldwide. The British government released data Friday showing the country's economy shrank 1.5 percent in the fourth quarter, after contracting 0.6 percent during the third quarter. The fourth-quarter decline was the worst in Britain since 1980.
In the first half-hour of trading, the Dow Jones industrial average fell 176.73, or 2.18 percent, to 7,946.07.
Broader stock indicators also fell. The Standard & Poor's 500 index fell 17.80, or 2.15 percent, to 809.70, and the Nasdaq composite index fell 25.66, or 1.75 percent, to 1,439.83.
The market has seen a turbulent week, with the Dow tumbling 4 percent Tuesday only to regain more than 3 percent Wednesday, followed by another big drop Thursday. Volatility has been more the rule than the exception in recent trading as investors sort through a plethora of wide-ranging earnings reports.