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Ardent Listener
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 Posted - 02/17/2009 : 20:12:17
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Financials hurt by worries over European banks * S&P 500, Dow fall to their lowest levels since Nov. 20 * Energy shares follow oil prices lower * Dow off 3.8 pct, S&P off 4.6 pct, Nasdaq off 4.2 pct
(Updates to close) By Leah Schnurr NEW YORK, Feb 17 (Reuters) -
U.S. stocks slid within
striking distance of the November bear-market low on Tuesday,
as grim manufacturing data signaled the recession is worsening
and warnings on risks facing European banks underscored the
continuing toll of the financial crisis. Financial stocks sank to 14-year lows after Moody's
Investors Service said banks could be hit by the recession in
Eastern Europe, pulling the S&P Financial index .GSPF down 8
percent. For more see [ID:nLH423223]. Data showing a sharp contraction in Japan's economy set the
tone early in the day and helped yank oil prices CLc1 down
nearly 7 percent to below $35 a barrel. Chevron and Exxon Mobil
were the Dow's biggest drags, sliding more than 4 percent. "As we retest these November lows, the reality that sets in
is that we may have another leg to go down in the economy and
the market," said Bucky Hellwig, senior vice president at
Morgan Asset Management in Birmingham, Alabama. U.S. banks, already beaten down by the failure of efforts
to save the financial system to take hold yet, slid. Dow
component JPMorgan (JPM.N: Quote, Profile, Research) was down 12.3 percent at $21.65 and
Wells Fargo (WFC.N: Quote, Profile, Research) dropped 13.1 percent to $13.69. The Dow Jones industrial average .DJI fell 297.81 points,
or 3.79 percent, to 7,552.60. The Standard & Poor's 500 Index
.SPX gave up 37.67 points, or 4.56 percent, at 789.17. The
Nasdaq Composite Index .IXIC lost 63.70 points, or 4.15
percent, to 1,470.66. Wall Street's slide pulled the S&P 500 and Dow to their
lowest levels since Nov. 20, when stocks hit 11-year lows. Just
before the end of the session, the Dow briefly broke through
its bear market closing low that was hit on Nov. 20. The day's losses brought the Dow down 13.9 percent since
the start of the year, while the S&P 500 is down 12.6 percent
and the Nasdaq has fallen 6.7 percent. A report showing that manufacturing production in New York
state fell to a record low in February stirred worries about
the deepening recession and added to fears that the new U.S.
economic stimulus package won't be a quick fix. U.S. President Barack Obama signed the $787 billion
economic stimulus bill into law on Tuesday, but investors are
fearful that the plan will not blunt the impact of the
recession soon enough. The White House hopes the package will
save or create 3.5 million jobs. "There's some question as to how effective the stimulus
will be in jump-starting the economy," said Michael Sheldon,
chief market strategist at RDM Financial in Westport,
Connecticut. "Based on the size and what's included, there's no doubt
that we'll get some stimulus out of the package. The only
question is how much, when will it start, and how long will it
last." Energy shares slid alongside oil, with Exxon Mobil (XOM.N: Quote, Profile, Research)
down 4.4 percent at $71.28 and Chevron (CVX.N: Quote, Profile, Research) fell 5.1 percent
to $66.18. The S&P energy index .GSPE dropped 6.3 percent. General Motors Corp (GM.N: Quote, Profile, Research) shares shed 12.8 percent to
$2.18 as GM and Chrysler prepared to submit a survival plan
under the terms of the $17.4 billion government bailout that
has kept the automakers afloat this year. [ID:nN17354623] Sentiment was further dampened by news that the Securities
and Exchange Commission had charged Houston-based Stanford
Financial Group with massive alleged fraud involving a
multibillion-dollar investment scheme that stretched from Texas
to Antigua and around the world. Wal-Mart (WMT.N: Quote, Profile, Research) was the only positive stock among the 30
components of the Dow industrials after the discount retailer
posted a quarterly profit that beat Wall Street's forecasts.
Wal-Mart rose 3.7 percent at $48.24. [ID:nN17535726] Trading was moderate on the New York Stock Exchange, with
about 1.61 billion shares changing hands, above last year's
estimated daily average of 1.49 billion, while on Nasdaq, about
2.38 billion shares traded, above last year's daily average of
2.28 billion. Declining stocks outnumbered advancing ones on the NYSE by
2,895 to 218 while decliners beat advancers on the Nasdaq by
about 2,280 to 399.
(Editing by Leslie Adler)
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