Banking sector losses weigh on Wall Street

Dow Jones: 10,719.71 (–520.06) Nasdaq: 2,381.05 (–101.47) SP 500: 1,120.76 (–51.77)US STOCKS declined yesterday, dragging the Dow Jones Industrial Average to the lowest level since September 2010, amid concern that Europe will fail to contain its sovereign-debt crisis and that the global economic recovery is faltering.

All 10 groups in the Standard and Poor’s 500 fell at least 2 per cent.

Bank of America and Citigroup dropped, pacing losses in financial shares, as the costs to protect the government debt of Greece, Italy, Spain and France rose.

The Dow Jones industrial average slid 520.06 points, or 4.63 per cent, to 10,719.71.

The S&P 500 fell 51.77 points, or 4.42 per cent, to 1,120.76.

The Nasdaq Composite dropped 101.47 points, or 4.09 per cent, to 2,381.05.

“The message is that the market is concerned about the financial industry,” Kevin Caron, market strategist in Florham Park, New Jersey, at Stifel Nicolaus, said.

“The fact that Bank of America has said that they are comfortable with fundamentals is very positive. Still, the banks are exposed to a deteriorating economy. The European debt crisis has a whole set of issues. The concern is about a spillover effect of that,” he said.

The S&P 500 has fallen 18 per cent from this year’s high in April on concern about Europe’s debt crisis and a political battle over the US debt ceiling that prompted SP to cut the its credit rating.

Bank of America dropped 11 per cent to $6.77.

Citigroup retreated 11 per cent to $28.49.

Treasuries rose, pushing yields on two- and 10-year notes toward record lows reached on Tuesday.

Gold rallied to a record for a third straight day.

The Morgan Stanley Cyclical Index of 30 stocks slid 4.8 per cent.

Walt Disney plunged 9.1 per cent, the most since 2008, to $31.54.

Wunderlich Securities cut its rating on the stock to “hold” from “buy” following its quarterly earnings report. TV station advertising sales are down by a mid-single digit percentage this quarter, the company said yesterday on a conference call after the market closed.

Net income rose 11 per cent to $1.48 billion, or 77 cents a share, in the period ended July 2nd. – (Bloomberg/ Reuters)