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The Dow Jones posted its third straight triple-digit loss Friday, sending the Dow Jones to its worst weekly performance since February 2009. Investors looked past solid earnings results to concentrate on President Obama’s plan to regulate the banking industry and the Chinese government’s moves to reign in spending.

Meanwhile, in more bad news, the jobless rate in 43 states rose in December, reversing a small decline from the month before.

The Dow Jones lost 213.27 points, or 2.01%, to 10,389.88, the S&P's 500 fell 21.56 points, or 1.89%, to 1,116.48 and the NASDAQ dipped 25.55 points, or 1.12%, to 2,265.70.

It’s nearly 18 months since the NASDAQ and S&P 500 lost this much ground in a week.

The government is looking to regulate banks, by reinstalling a law out of use for more than 10 years. The law would determine the extent to which banks can work in either retail or commercial banking.

Among the retail banks, Citigroup lost 0.6%. Bank of America slumped 3.7%, while Wells Fargo sank 2.6%.

Three banks expected to bear the brunt of the new banking rules were Goldman Sachs, Morgan Stanley and JPMorgan which sank 4.2%, 5.3% and 3.4% respectively.

One of the few gainers on the index was GE, which tacked on 0.6% after saying the year ahead looked positive despite missing earnings estimates.

Among the retailers, Wal-Mart was steady although Macy’s shed 1.1%. Amazon.com lost 4.1%.

In a wrap of the tech stocks Microsoft slumped 3.5%, though Google set the low water mark, down 5.7% after co-founders Larry Page and Sergei Brin plan to off-load as much as US$5.5 billion in stock.

All the major players in the sector lost ground.

One of the few gainers was McDonald’s, which put on 0.3% after earnings slightly beat estimates. Overall the fast food market was resilient in the face of widespread selling.

COMEX gold for February delivery fell US$13.50 to settle at US$1,089.70 an ounce.

ConocoPhillips retreated 3.1%, while Chevron was down 2.2%. Exxon Mobil, the industry giant, was down 0.9%.

NYMEX light crude oil for February delivery lost US$1.54 to settle at US$74.54.

European Markets

The same concerns that saw huge losses on the US markets impacted the European markets, with concern rife over the effect on the banking sector President Obama’s regulation plans would have.

The UK benchmark FTSE 100 shed 32.11, or 0.60% to 5,302.99, while French CAC40 lost 41.38, or 1.07% to 3,820.78. The German DAX fell 51.65, or 0.90% to 5,695.32.

As in the US, the banking sector was the hardest hit with a measure of the strength in the sector hitting five-month lows.

In the UK, Barclays slumped 4.1% and Royal Bank of Scotland retreated 1.8%.

HSBC, Europe’s largest bank, was down a more muted 0.2%.

Swiss banking giants Credit Suisse and UBS slumped 6.4% and 3.9% respectively.

Deutsche Bank was down 4.2%.

Among the resource stocks sentiment continued to be affected by the prospect of China raising interest rates and curbing lending.

Rio Tinto lost just 0.1% though losses for the week were more than 8%. Aussie peer BHP Billiton lost 0.4% on Friday.

Kazakhstan focused copper producer, Kazakhmys, lost 8.2% in the week.

UK confectioner Cadbury’s put on 4.9% after finally caving to four months of pressure from Kraft and accepting a nearly US$20 billion offer for the company.

GlaxoSmithKline lost 1% and Astrazeneca dipped 0.8% though the healthcare sector was one of just two to advance over the week.

Japanese Markets

Japan’s Nikkei slumped on concerns President Obama’s proposal to reduce risk-taking at banks would discourage people from investing in high-risk assets. Exporters weakened as the yen strengthened against the greenback.

The Nikkei 225 fell 277.86, or 2.56% to 10,590.55.

Commodity stocks were hit by concerns demand for commodities will decrease due to President Obama’s proposal. Oil explorer Inpex and Nippon Mining dropped 4.2% and 3.2%.

Trading house Mitsubishi Corp slumped 4.5% due to its high exposure to commodity sales.

Automakers Toyota and Honda shed 3.2% and 2.4%, while electronics companies Sony and Panasonic slid 1.3% and 1.4%.

Shin-Etsu sank 6% as it forecast full-year net income to be below analyst estimates.

Komatsu and Hitachi Construction Machinery lost 2.6% each.

Hong Kong Market

Hong Kong stocks, like most other global markets, lost ground Friday. Stocks, however were more affected by falling commodity prices and the prospect of tightened lending in China, than banking restrictions in the US.

The Hang Seng lost 136.49, or 0.65% to 20,726.18.

There was surprising strength shown by the banks. Bank of China edged 0.5% higher.

Bank of Communications soared 3.2%, while heavyweight lender ICBC jumped 2.3%.

However, HSBC, which makes up one-sixth of the market lost 1.6%.

Shoe maker Yue Yuen Holdings put on 0.4%, while Li & Fung, which makes clothes for the US giant Wal-Mart slumped 4.7%.

Resource stocks were heavily sold, with Aluminium Corp of China retreating 2.7%. The stock lost 9.1% of its value last week.

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