U.S. Stocks Fall, Led by Biggest Drop in Financials Since

From: Bloomberg.com

U.S. stocks fell, sending financial shares to their biggest drop in eight years, on heightened concern that bank failures will spread.

Washington Mutual Inc. posted the steepest retreat ever and National City Corp. tumbled to a 24-year low after last week’s collapse of IndyMac Bancorp Inc. spurred speculation that regional banks are short of capital. The companies said they’ve seen no unusual depositor activity. Fannie Mae and Freddie Mac erased an earlier rally fueled by Treasury Secretary Henry Paulson’s plan to help rescue the largest U.S. mortgage lenders.

The declines pushed the Standard & Poor’s 500 Financials Index of 89 companies down 6.1 percent, its steepest plunge since April 2000. The S&P 500 slid 11.19 points, or 0.9 percent, to 1,228.3. The Dow Jones Industrial Average lost 45.35, or 0.4 percent, to 11,055.19. The Nasdaq Composite Index slipped 26.21, or 1.2 percent, to 2,212.87. More than two stocks dropped for each that rose on the New York Stock Exchange.

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