(By Salman - iStockAnalyst Writer)

US stocks finished with sharp losses on Friday due to the ongoing anxiety about the health of the banking system.

The Dow Jones Industrial Average slumped 82.35 points or 1.04% to finish at 7,850.41. The S&P 500 shed 8.35 points or 1% to 835.19. The Nasdaq Composite dropped 7.35 points or 0.48% to 1,534.36.

For the week, Dow was down 430.18 points or 5.2%. S&P fell 44.76 points or 4.8%, while Nasdaq Composite settled with a weekly loss of 57.35 points or 3.60%.

A survey released Friday by the University of Michigan and Reuters showed consumer sentiment index dropped in early February to 56.2 from 61.2 in January. Economists had been looking for a reading of 61.

The U.S. House of Representatives on Friday approved a $787 billion stimulus bill, aimed at aimed at rescuing the economy from deepening recession.

Shares of financials retreated after UK based banking group Lloyds Banking Group Plc (NYSE: LYG) said it expects HBOS Plc to report a 10 billion-pound ($14.5 billion) annual pretax loss. Bank of America (NYSE: BAC) plummeted 30 cents or 5.11% to $5.11. J.P Morgan (NYSE: JPM) tumbled $1.50 or 5.73% to $24.69. Citigroup Inc. (NYSE: C) slipped 12 cents or 3.32% to $3.49. Share of American Express Co. (NYSE: AXP) declined 45 cents or 2.78% to $15.74.

Late on Thursday, Wells Fargo & Co (NYSE: WFC), the fourth-biggest U.S. bank, revised the size of its previously reported fourth-quarter loss by 7% to 84 cents from 79 cents because of a new investment losses. Shares of Wells Fargo plunged $1.04 or 6.19% to $15.76.

Automaker General Motors (NYSE: GM) lost 15 cents or 5.66% to end at $2.50.

Shares of retail giant Wal-Mart (NYSE: WMT) slid $1.60 or 3.32% to $46.53.

Home improvement retailer Home Depot Inc. (NYSE: HD) retreated 76 cents or 3.46% to $21.22.

Diversified US firm, General Electric (NYSE: GE) fell 24 cents or 2.05% to $11.44.

Early on Friday, PepsiCo (NYSE: PEP) announced that fourth-quarter net income fell to $716 million, or 46 cents a share, from $1.26 bilion, or 77 cents a share in the prior year quarter. On an adjusted basis, the company earned 88 cents a share. Revenue rose about 3% to $12.73 billion. Shares of the company rose 57 cents or 1.10% to $52.57.

Abercrombie & Fitch Co. (NYSE: ANF) soared $2.08 or 10.05% to $22.78 after the retailer reported that its fourth-quarter net income fell to $68.4 million, or 78 cents a share, from $216.8 million, or $2.40 in the same quarter, a year ago. Sales dropped 19% to $998 million.

European stocks settled mixed. The U.K. FTSE fell 12.65 points or 0.30% to close at 4,189.59. The German DAX and French CAC advanced 0.13% and 1.17% respectively.

Asian stocks finished with gains. The Nikkei 225 rose 74.04 points or 0.96% to 7,779.40. Hang Seng Index in Hong Kong advanced 326.37 points or 2.47% to 13,554.67.

NYMEX crude oil for March delivery climbed $3.53 or 10% to $37.51 a barrel.

Disclosure: Author does not own any of the stocks discussed here.