RTRS: US STOCKS-Wall St drop on banks plan fears, Wal-Mart
U.S. stocks fell on Tuesday as bank shares slid on fears that the government's plans to shore up the financial sector and revive the economy may not be enough to contain the worst financial crisis since the 1930s.
A brokerage's dour view on Wal-Mart Stores (WMT.N) added to the negative tone, with the retailer's stock among the Dow's top drags and falling more than 2 percent.
The S&P financial index declined 3.7 percent as shares of banks and other financial institutions dropped before the Obama administration's announcement of a financial sector rescue plan.
Bank of America (BAC.N) declined 10.6 percent to $6.16 on the New York Stock Exchange, while shares of Wells Fargo (WFC.N) declined 6 percent to $17.82. Goldman Sachs (GS.N) was off 3 percent at $96.95, while JPMorgan (JPM.N) tumbled more than 3 percent.
"The problems are bigger and worse than anyone had anticipated," said John O'Brien, senior vice president at MKM Partners LLC in Cleveland.
"A lot of people believe that we are just still at the tip of the iceberg and the additional $350 billion (of rescue funds) may get us only halfway to where we really need to be as far as solvency and liquidity."
The Dow Jones industrial average .DJI fell 102.27 points, or 1.24 percent, to 8,168.60. The Standard & Poor's 500 Index .SPX shed 12.26 points, or 1.41 percent, to 857.63. The Nasdaq Composite Index .IXIC dropped 12.42 points, or 0.78 percent, to 1,579.14.
Investors hope that Treasury Secretary Timothy Geithner would restore confidence in the financial system when he unveils a plan to relieve banks of money-losing assets at 11 a.m. (1600 GMT).
Insurers were the other standout casualties.
Shares of U.S. property and life insurer Hartford Financial Services Group (HIG.N) slid 6 percent to $14.10 after its credit ratings were cut. Rival MetLife (MET.N) , the No. 1 U.S. life insurer, was down 3.6 percent to $30.26.
Principal Financial (PFG.N) , another insurer, tumbled 24.1 percent to $12.85. Just like the banks, insurers are saddled by money-losing assets on their books.
