The U.S. stocks dropped and the major indexes suffered losses of 1% and more on Friday – sending the market to its first weekly drop in a month, American International Group Inc. reported a $7.8 billion loss and Citigroup Inc. unveiled plans to shed about half a trillion dollars in assets.

The Dow Jones Industrial Average (DJI) fell 120.9 points, or 0.9%, to end at 12,745.88, with the blue-chip index shedding more than 300 points, or 2.4% on the week. The Nasdaq Composite Index lost 5.72, or 0.2 percent, to 2,445.52. Three stocks fell for every two that rose on the New York Stock Exchange, where with only 1.09 billion shares traded it was the slowest session of the year.

Dow's fall was led by AIG (AIG) down 8.8%, following its larger-than-forecast loss, which led Standard & Poor's and Fitch to cut the insurance giant's credit rating. AIG fell the most since February as the company's second straight quarterly deficit spurred speculation more losses are coming in the financial industry. AIG lost $3.87, or 8.8 percent, to $40.28, contributing the most to the declines in the S&P 500 and Dow.  The Standard & Poor's 500 Index fell 9.4, or 0.7 percent, to 1,388.28, giving it a 1.8 giving it a weekly loss of 1.8%. Citigroup Inc. lost 2.8 percent to $23.63. The biggest U.S. bank said it plans to sell $400 billion in assets as part of a program to return to profitability.

Freeport-McMoRan Copper & Gold Inc. posted its biggest decline in a week after rising copper stockpiles signaled demand from China is slowing. Freeport, the world's second-largest copper producer, slumped 3.3 percent to $114.22.  Exxon the largest U.S. energy company, slid 0.8 percent to $88.82. Nucor Corp. led the Russell 3000 Steel Industry index to a 2.5 percent drop from a record. Mylan Inc. fell 8.4 percent to $11.42.

The Nasdaq Composite (RIXF) dropped 5.72 points, or 0.2%, to 2,445.52, a drop of 1.3% from last Friday's close. The Volume on the New York Stock Exchange neared 3.5 billion, with declining stocks outgunning advancers 8 to 7. On the Nasdaq, more than 1.7 billion shares were exchanged, and decliners edged ahead of advancers, 8 to 7.