By Rob Curran
Last update: 4:48 p.m. EDT March 20, 2009Comments: 4
NEW YORK (MarketWatch) -- U.S. stocks slid and the Dow Jones Industrial Average had its sharpest drop since March 5 after sobering comments about bank failures from Federal Deposit Insurance Corp. Chairwoman Sheila Bair and as traders digested the Federal Reserve's latest tactic.
Despite hundreds of billions of dollars in commitments to add liquidity to mortgages and other bank lending programs from the Federal Reserve and the Treasury, many banks are on their knees. They are laden with mortgage securities and other assets that nobody wants to buy, and likely facing more trouble recouping consumer and business debt in a deepening recession.
Overall, the Dow fell 122.42 points, or 1.65%, to 7278.38, paring its gains for the week to less 0.8%, and bringing it within 12.5% of its lowest level in more than a decade marked earlier in March. Still, the Dow had its first back-to-back weekly gain since May 2008.
The Standard & Poor's 500 fell 15.5 points, or 1.98%, to 768.54, though it added 1.6% on the week for its first two-week gain this year. The technology-oriented Nasdaq Composite fell 26.21, or 1.77%, to 1457.27, and added 1.8% on the week to bring its gain for March to 5.8%.
The financial sector led the decline, as Bank of America fell 74 cents, or 11%, to 6.19.
Citigroup tacked on 2 cents, or 0.8%, to 2.62, and rose 47% on the week. Friday, Citi promoted Edward "Ned" Kelly to chief financial officer, and shifted Gary Crittenden to head of its holding company for "non-core" businesses.
FDIC head Bair reiterated her expectation of $65 billion in losses for the FDIC's fund because of bank failures during the next five years in a speech that hit the tape around 12:30 p.m. EDT.
Bear Turns to Bull?
March 20, 2009 updated each market day
The S&P 500 rally that began last week finished this week with a two-day slump. Click here to review the previous rallies during the current bear market.
No comments:
Post a Comment