Wall Street slides on reports of euro zone downgrades

NEW YORK (Reuters) - Stocks tumbled on Friday after news reports that Standard & Poor's would downgrade credit ratings on several euro-zone countries.
Among the reports about downgrades, French daily Les Echos reported that S&P will cut the credit ratings of Italy, Spain and Portugal by two notches and downgrade France and Austria by one notch. S&P wouldn't make any changes to ratings for Germany, the Netherlands, Finland and Luxembourg its adjustment of euro zone sovereign ratings, the newspaper said. The announcement is expected around 4 p.m.

S&P declined to comment.
"If Germany is downgraded, then that would be a game changer, but the countries that are being talked about were pretty much expected," said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.
The slide, led by banks, came despite solid data that showed U.S. consumer sentiment hit an eight-month high as Americans became more optimistic about job prospects. The S&P financial index <.GSPF> fell 1.6 percent, making this sector the day's biggest decliner.
The tug of war between Europe's debt crisis and relatively solid U.S. economic indicators has stymied investors' attempts to assess how much risk to take on in the market.
The Dow Jones industrial average <.DJI> was down 124.31 points, or 1.00 percent, at 12,346.71. The Standard & Poor's 500 Index <.SPX> was down 13.95 points, or 1.08 percent, at 1,281.55. The Nasdaq Composite Index <.IXIC> was down 26.52 points, or 0.97 percent, at 2,698.18.
For the week, the S&P was on track to end moderately higher, up 0.3 percent. The Dow was on track to finish the week flat while the Nasdaq was set to close the week with a gain of 1 percent.
Shares of JPMorgan Chase & Co slid 3.6 percent to $35.53 after the bank said fourth-quarter profit fell as the European debt crisis weighed on trading and corporate deal-making.
JPMorgan's Chief Executive Jamie Dimon expressed renewed concerns about the euro-zone debt crisis.
"We're very very cautious," Dimon said in a conference call with reporters. "I would put myself in the 'increasing worried' category."
The KBW index of bank stocks <.BKX> was down 1.2 percent, following a streak of gains. As of Thursday's close, the index was up almost 10 percent for the year.
JPMorgan's results "could be enough to make people take a bit of profits off that strong move," said Brian Lazorishak, senior quantitative analyst and portfolio manager at Chase Investment Counsel in Charlottesville, Virginia.
Bank of America shares fell 2.8 percent to $6.60. Goldman Sachs lost 2.6 percent to $98.62.
(Reporting By Angela Moon; Additional reporting by Jed Horowitz; Editing by Kenneth Barry)