NEW YORK -- U.S. stocks fell Friday, sending the Standard & Poor's 500 index to its worst January since 2010, as earnings reports at Amazon.com and Mattel disappointed investors and turmoil in emerging markets continued.
Amazon slumped 11 percent after the world's largest Web retailer reported profit and sales that trailed analysts' estimates. Mattel sank 12 percent after a drop in Barbie sales weighed on results. Google jumped 4 percent, pacing gains in technology shares, after sales topped estimates on growing advertising spending during the holiday season.
The S&P 500 retreated 0.7 percent to 1,782.43. The index fell 0.4 percent over the past five days for a third week of losses, the longest streak since May 2012. The Dow Jones industrial average dropped 149.76 points, or 0.9 percent, to 15,698.85, the lowest in almost three months. About 7.8 billion shares changed hands on U.S. exchanges Friday, 25 percent above the three-month average.
"It seems investors can expect increased volatility and more modest returns as the year unfolds," Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, said in a phone interview from Minneapolis. He helps oversee $112 billion. "We need earnings to drive the market to meaningfully higher levels and to do that you need an improving economy. We'll get a better read on that over the next week."
The S&P 500 fell 3.6 percent in January, its first monthly decline since August, as emerging-market currencies
slumped amid signs China's economy is slowing. While the benchmark has retreated in January 24 times since 1950, the gauge ended the year lower than its Jan. 31 reading in only 11 of those years, according to data compiled by MKM Partners. A lower start to the year resulted in a full-year decline for the index 58 percent of the time.
The S&P 500 last fell to start the year in 2010, when the gauge rallied 17 percent in the next 11 months to finish the year with a 13 percent gain.
A report Friday showed consumer spending climbed more than forecast in December even as incomes stagnated. Household purchases, which account for about 70 percent of the U.S. economy, rose 0.4 percent, after a 0.6 percent gain the prior month that was larger than previously estimated, Commerce Department figures showed. Incomes were unchanged, pushing the saving rate to the lowest level in almost a year.
"I'm really bearish and defensive at the moment," Daniel Weston, a fund manager at Aimed Capital in Munich, said by telephone. "Amazon was a big concern because the earnings were a reflection on the consumer. I'm concerned about growth and inflation coming off, continuing to trend lower."
The Chicago Board Options Exchange Volatility Index rose 6.5 percent Friday to 18.41. The gauge of S&P 500 options known as the VIX has gained 34 percent this year.
Seven out of the 10 main industries in the S&P 500 fell Friday, as energy producers, consumer-discretionary companies and financial firms led declines. Utilities advanced 0.8 percent for the top gain.
Amazon tumbled 11 percent, the most in two years, to $358.69. The Seattle-based company said after Thursday's market close that earnings rose to 51 cents a share in the fourth quarter, falling short of the 69-cent profit that analysts projected on average. Sales growth slowed outside the United States, while holiday shipping costs surged. Revenue rose 20 percent to $25.6 billion, trailing the $26.1 billion average estimate.
MasterCard slid 5.1 percent to $75.68. The second-biggest U.S. payments network reported fourth-quarter profit that missed analysts' estimates as expenses climbed 11 percent.
Mattel sank 12 percent to $37.84. The world's largest toymaker reported that fourth-quarter profit climbed 20 percent to $1.07 a share, missing the $1.20 that analysts had estimated. Sales dropped 6.3 percent to $2.11 billion, compared with projections for $2.37 billion.
Google climbed 4 percent to an all-time high of $1,180.97. The search provider said fourth-quarter revenue excluding sales passed on to partners rose 11 percent to $13.6 billion, topping estimates of $13.4 billion.
Retailers spent more on advertising during the holidays, making up for lower ad prices.