Stocks Close Lower On More Credit Worries
Stocks closed sharply lower as investors remained skittish about the housing slump's toll on the economy and potential credit losses at big financial services companies.
Up until the last hour of trading, major indexes had been stuck in a narrow range, erratically seesawing from negative to little changed for much of the session.
But losses quickly mounted heading toward the close as shares of financial services companies extended their declines.
Shares of Citigroup , the No. 1 U.S. bank, dropped more than 4 percent, while those of Bank of America, the No. 2 U.S. bank, declined more than 3 percent.
"Too Much Fear"
"There's just too much fear in the financials," said John O'Brien, senior vice president at MKM Partners LLC in Cleveland, Ohio. "The fear is back again that the write-downs are kind of a
mystery and no one really knows what the bottom is or what the outcome is going to be."
Energy shares, including ExxonMobil, also weighed on the broader market as they dropped in sync with crude oil prices.
On the Nasdaq, investors again sold shares of the tech sector's recent darlings, including BlackBerry maker Research in Motion.
Shares of American International Group led the Dow's biggest decliners after a brokerage cut its price target on the insurer's stock, citing the impact of the credit turmoil.
Chief Executive John Stumpf of Wells Fargo , the No. 2 U.S. mortgage lender, said at a conference that the U.S. housing downturn was far from over and was the worst since the Great Depression.
Shares of Fannie Mae , the largest U.S. home funding source, tumbled 9.4 percent while shares of Freddie Mac , the No. 2 U.S. home funding company, shed 4.4.
Worries About Retailers
JC Penney dimmed hopes that holiday shopping would be strong as it reported a 9 percent dropin quarterly profit and said its sales weakened "dramatically" in September and October.