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US finance stocks decline sharply | US finance stocks decline sharply |
(about 2 hours later) | |
Leading US indexes saw their biggest one-day fall in nearly two months, with banking shares falling sharply amid concerns over the sector's outlook. | Leading US indexes saw their biggest one-day fall in nearly two months, with banking shares falling sharply amid concerns over the sector's outlook. |
The benchmark Dow Jones Industrial Average shed 332 points or 4% to 7,949.09 while the Standard & Poor's dropped 5.2% and the Nasdaq shed 5.7%. | The benchmark Dow Jones Industrial Average shed 332 points or 4% to 7,949.09 while the Standard & Poor's dropped 5.2% and the Nasdaq shed 5.7%. |
As he became the 44th US president on Tuesday, Barack Obama highlighted the economic challenges ahead. | As he became the 44th US president on Tuesday, Barack Obama highlighted the economic challenges ahead. |
A number of banks have posted poor earnings recently, compounding jitters. | A number of banks have posted poor earnings recently, compounding jitters. |
"There's just tremendous fear and uncertainty in the banking sector," said Richard Cripps, chief market strategist for Stifel Nicolaus. | "There's just tremendous fear and uncertainty in the banking sector," said Richard Cripps, chief market strategist for Stifel Nicolaus. |
Ongoing falls | Ongoing falls |
Bank of America fell 28%, JP Morgan dropped 20.7% , while Citigroup fell 20%. | Bank of America fell 28%, JP Morgan dropped 20.7% , while Citigroup fell 20%. |
On Tuesday Bank of New York Mellon brought forward its earnings results, saying profit slid 88% for the quarter. State Street meanwhile saw its profits during the quarter drop 71%. | |
This comes after Bank of America and Citigroup both recently announced poor results. Citigroup set out plans to divide the firm in two last week, as it revealed a quarterly loss of $8.29bn. | This comes after Bank of America and Citigroup both recently announced poor results. Citigroup set out plans to divide the firm in two last week, as it revealed a quarterly loss of $8.29bn. |
Merrill Lynch also recently posted a fourth-quarter 2008 loss of $15.31bn. | Merrill Lynch also recently posted a fourth-quarter 2008 loss of $15.31bn. |
And this week news from Royal Bank of Scotland that it expects losses for 2008 to exceed £28bn have further added to concerns. | And this week news from Royal Bank of Scotland that it expects losses for 2008 to exceed £28bn have further added to concerns. |
The falls in New York came after declines in London. RBS shares shed 11% on Tuesday, after plunging 67% a day earlier. | The falls in New York came after declines in London. RBS shares shed 11% on Tuesday, after plunging 67% a day earlier. |
The newly formed Lloyds Banking Group shed just over a third of its value and Barclays dropped 18%. | The newly formed Lloyds Banking Group shed just over a third of its value and Barclays dropped 18%. |
Additional moves by the UK government on Monday to encourage banks to lend more failed to boost investor confidence as fears grew that RBS might be nationalised. | Additional moves by the UK government on Monday to encourage banks to lend more failed to boost investor confidence as fears grew that RBS might be nationalised. |
"We thought 2008 was bad. I think 2009 is going to be a continuation of that whole song," said Keith Wirtz, chief investment officer of Fifth Third Asset Management. | "We thought 2008 was bad. I think 2009 is going to be a continuation of that whole song," said Keith Wirtz, chief investment officer of Fifth Third Asset Management. |
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