Banks decline on fears over global recovery

Dow Jones: 12,290.37 (–279.42) SP 500: 1,314.54 (–30.66) Nasdaq: 2,769.19 (–66.11): WALL STREET ended a four-day rally with its worst session since August yesterday and could suffer more losses in coming days as investors faced more signs the economic recovery is fading.

All 10 Standard & Poor’s sectors ended more than 1 per cent lower, and all 30 stocks in the Dow industrials fell. Banks were the biggest decliners as the economic reports painted a glum picture for jobs and manufacturing.

Yesterday’s decline took the S & P through its 50-day moving average, leaving the market vulnerable to more losses.

The Dow Jones industrial average was down 279.42 points, or 2.22 per cent, at 12,290.37.

The Standard & Poor’s 500 Index was down 30.66 points, or 2.28 per cent, at 1,314.54.

The Nasdaq Composite Index was down 66.11 points, or 2.33 per cent, at 2,769.19.

The SP financial sector slumped 3.5 per cent, with JPMorgan Chase and Bank of America among the biggest drags. JPMorgan fell 3.4 per cent to $41.75, while Bank of America lost 4.3 per cent to $11.24.

According to ADP, US private employers added a scant 38,000 jobs in May, the lowest since September 2010, and far below what had been expected. Several banks cut their forecasts for tomorrow’s non-farm payroll report from the Labor Department.

“The ADP number suggests that we’ll see a weak payroll report on Friday, and it’s very possible that soon people will be reducing their GDP forecasts,” said Tim Speiss, head of personal wealth advisers at EisnerAmper in New York.

Manufacturing activity declined sharply in May, according to the Institute for Supply Management’s index, which suffered its biggest fall since September 2009.

Yesterday’s data was the latest in a string of discouraging reports on home sales, consumer confidence and midwest business activity.

Automakers tumbled after reporting slightly lower car sales in May as economic weakness and high gas prices pushed consumers to delay purchases.

General Motors lost 5 per cent to $30.23, and Ford sank 4.6 per cent to $14.23.

Almost five stocks fell for every one that rose on the New York Stock Exchange, while on the Nasdaq about 81 per cent of stocks finished negative. – (Reuters)