THE stock market suffered its worst setback in more than 10 months as investors rejected President Barack Obama's plans to restrict big banks and earnings reports that just weren't good enough.

The Dow Jones industrial average had its fourth big drop in five trading days yesterday, sliding 217 points. Over the past three days, the Dow lost 552 points, or 5.2 percent, and over the past five days, it fell 537 points, after gaining 115 points on Tuesday.

It was the worst showing for the market since it began its recovery last March. The Dow lost 4.1 percent this week, its worst week since it hit a 12-year low in March.

All the major indicators fell more than 2 percent yesterday.

Investors are finding uncertainty and bad news wherever they look. Even before Obama announced his plan on Thursday, they were selling stocks on disappointing earnings and concerns that a possible slowdown in China's economy might spread. The mood in the market was dark enough that upbeat earnings yesterday from General Electric Co. and McDonald's Corp. weren't enough to sway investors.

The problem with earnings reports is that they're not meeting investors' high expectations. Tech stocks were among the big losers yesterday after Google Inc.'s fourth-quarter revenue didn't meet forecasts, and after a Citigroup analyst lowered his rating on seven chip makers.

The market is particularly sensitive to tech companies, since they are seen as indicators that the economy is returning to health - or possibly backsliding. But any part of any company's earnings report has the potential to upset the market.

"We expect (earnings) to be better," said Brett D'Arcy, chief investment officer at CBIZ Wealth Management Group in San Diego. "People are being more particular."

In some respects, stocks' big plunge isn't a surprise. Many analysts have been predicting a correction, which technically is a drop of 10 percent from a recent market high, since before the start of the year. They have warned that investors were expecting too much from companies this early in an economic recovery.

Meanwhile, John Brady, a senior vice president of global interest rates at MF Global, said concerns surrounding Obama's plan and China's efforts to tame its economy have investors cutting their exposure to risk.

Obama spooked the market Thursday after asking Congress for limits on how large big banks can be and to end some of the risky trading large financial companies have used in recent quarters to boost their profits. It's not clear what will come of the proposed changes but investors are selling anyway.

"It appears to be a move to put some shackles on risk-takers," Mitch Schlesinger, managing partner at FBB Capital Partners in Bethesda, Maryland, said of the new proposals.

Obama's push for tighter regulations comes at the same time China is moving to cool its economy with measures such as reining in lending and stepping up regulatory oversight of that country's banks.

The Dow fell 216.90, or 2.1 percent, to 10,172.98. The Dow's three-day loss was its worst since March. The last time the Dow logged five straight triple-digit point swings was December 2008.

The Standard & Poor's 500 index fell 24.72, or 2.2 percent, to 1,091.76. The index is down 5.1 percent in three days, its worst drop since March 2009.

Yesterday's drops were the worst for the Dow and the S&P 500 index since Oct. 30.

The Nasdaq composite index fell 60.41, or 2.7 percent, to 2,205.29, reflecting a pullback in technology stocks in response to Google's earnings, and also an analysts' downgrade of chip makers.

For the week, the Dow lost 4.1 percent, the S&P 500 index slid 3.9 percent, and the Nasdaq lost 3.6 percent.

There is more uncertainty for the markets next week, and not just because more earnings reports will arrive. The Federal Reserve holds its first meeting on interest rates of 2010. No one expects the central bank to boost rates but investors will be looking for the Fed's take on the economy.

Investors are also waiting to see whether the Senate will confirm the reappointment of Fed Chairman Ben Bernanke. Some lawmakers are holding Bernanke responsible for the economy's lingering problems.

There are signs the big moves in the market will continue. The Chicago Board Options Exchange's Volatility Index jumped 52.5 percent for the week. An increase in the VIX, which is known as the market's fear gauge, is a sign that investors predict more gyrations in stocks.

Google dropped $32.97, or 5.7 percent, to $550.01.

Chip maker Advanced Micro Devices Inc. fell $1.11, or 12.4 percent, to $7.88 after the downgrade of the industry.

Shares in GE and McDonald's both rose on their earnings, but didn't motivate investors to buy across the market.

GE reported a better-than-expected profit and said orders and backlogs for its products and services are increasing. Its shares rose 9 cents to $16.11.

McDonald's earnings showed that it was holding up better than its competitors as consumers cut back their spending. The stock rose 19 cents to $63.39.

Credit card issuer Capital One Financial Corp. fell $5.17, or 12.1 percent, to $37.53 after the company reported after the end of trading Thursday that it saw an increase in the percentage of loans it expects won't be repaid.

Other credit cards fell after Fitch Ratings said delinquent balances on credit cards hit a record high in November and an analyst downgraded credit card companies. American Express Co. dropped $3.57, or 8.5 percent, to $38.59.

Five stocks fell for every one that rose on the New York Stock Exchange. Volume came to 1.5 billion shares, in line with Thursday.

Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was flat at 3.59 percent from late Thursday.

The dollar was mixed against other major currencies, while gold fell.

The Russell 2000 index of smaller companies fell 11.24, or 1.8 percent, to 617.12.