* McDonald's lower quarterly profit misses estimate
* GE profit meets forecasts, revenue shy of estimates
* U.S. existing home sales fall as inventories drop
* Dow off 1.4 pct, S&P 500 off 1.6 pct, Nasdaq off 2.1 pct
By Chuck Mikolajczak
NEW YORK, Oct 19 (Reuters) - U.S. stocks were on track for a second straight decline on Friday as earnings from General Electric and Microsoft rekindled worries a b out corporate profits, weighing on the technology and industrial sectors.
The sell-off occurred on the 25th anniversary of the stock market crash of 1987 - known as Black Monday - when the Dow Jones industrial average plummeted 22.6 percent - its worst single-day percentage loss.
Earnings on Friday from large multinationals underscored the effect of the global economic slowdown. General Electric Co shares fell 3.3 percent to $22.05. The stock was one of the biggest drags on the S&P 500 after the largest U.S. conglomerate pos t ed quarterly earnings that met Wall Street's expectations, but revenue fell short of estimates. GE, however, stood by its full-year earnings forecast.
The S&P 500 appeared to be once again testing its 50-day moving average, seen as a key support level that could trigger more selling if convincingly broken, after the benchmark index managed to bounce off that average earlier in the week.
The benchmark S&P 500 index has been range-bound since the Sept. 13 announcement by the U.S. Federal Reserve of its latest plan to stimulate the economy. During that period, the S&P 500 has moved between near five-year highs and the 50-day moving average.
"It does seem we are in this range-bound area, still up near the highs, which is good, but these earnings better start coming in better or we will be in for more pain," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, Ohio.
"When you get to the top of a range like we were on the S&P, you can definitely see where you work up and get beat down really fast, and clearly when you get the news driving it, that is what definitely can happen."
The beat rate for revenue forecasts so far is 41.4 percent, trailing both the 55 percent average over the past four quarters and the long-term average of 62 percent, according to Thomson Reuters data.
McDonald's Corp was the heaviest weight on the Dow industrials, down 4 percent at $89.17 after the world's biggest fast-food restaurant chain reported a lower quarterly profit that missed analysts' expectations.
The Dow Jones industrial average lost 188.29 points, or 1.39 percent, to 13,360.65. The Standard & Poor's 500 Index dropped 22.59 points, or 1.55 percent, to 1,434.75. The Nasdaq Composite Index fell 63.59 points, or 2.07 percent, to 3,009.28.
Despite the day's declines, the S&P 500 has advanced 0.4 percent so far this week. The Dow is up 0.2 percent, but the Nasdaq is off 1.1 percent for the week. Each of the three major U.S. stock indexes advanced for the first three days of the week as corporate earnings appeared to be better than initially expected.
On Thursday, a string of earnings disappointments, including surprisingly weak results from Google that were erroneously released hours before they were expected, gave investors a reason to sell some stocks and the market finished lower. On Friday at midday, Google's stock was down 2 percent at $681.
Microsoft Corp said late Thursday its quarterly profit fell a greater-than-expected 22 percent, as sales of computers running its Windows operating system dipped and some revenue was deferred before the release of its core Windows and Office products. The stock tumbled 2.9 percent to $28.64.
"Tech is obviously very sensitive to the U.S. economy and global economy, for that matter, and the fact they are missing consistently is bringing up a 'sell first, ask questions later' mentality," Detrick said.
But diversified U.S. manufacturer Honeywell International Inc was a bright spot, up 1.7 percent at $62.47 after reporting a 10 percent jump in quarterly earnings as declining natural gas prices helped increase profit at its UOP chemical arm, offsetting weakness in Europe.
The S&P industrials sector index tumbled 1.6 percent, while the S&P information technology sector index lost 1.9 percent.
Of the 116 S&P 500 companies that have reported results so far in this earnings season, 60 percent have exceeded analysts' estimates. Earnings are expected to drop 1.8 percent in the third quarter from a year ago, according to Thomson Reuters data, compared with a forecast calling for a drop of 2.3 percent earlier in the week.
Semiconductors added to the weakness, with a 4.9 percent gain in SanDisk Corp shares to $44.98 overshadowed by a 14.4 percent plunge in the stock of Marvell Technology Group Ltd , which fell to $7.56, and a 15.1 percent fall in Advanced Micro Devices Inc shares to $2.22. Both SanDisk and AMD posted quarterly results after the bell on Thursday, while Marvell cut its outlook.
The PHLX semiconductor index lost 2.6 percent.