U.S. stocks fell today on bearish news in the financial sector despite another drop in crude oil prices.
The Dow Jones industrial average closed down 139.88, or 1.19%, at 11,642.47; the S&P 500 fell 15.72, or 1.2%, ending at 1,289.59; and the Nasdaq composite closed down 9.34, or 0.38%, at 2,430.61. All numbers are preliminary.
Goldman Sachs Group Inc., which had weathered the credit crisis better than its peers so far, lost nearly 6% after a Deutsche Bank analyst downgraded the stock to hold from buy, saying the firm had among the highest exposures to equities during a period of significant equity market declines. Morgan Stanley also fell sharply as the same analyst warned of more credit losses.
JPMorgan Chase & Co. warned it might have to write down more credit-related assets, which sent its shares down nearly 10%. Overall, financial companies have continued to perform poorly in the second quarter, as their profits dropped by a combined 90% vs. a year earlier.
Also, Wachovia cautioned that it might suffer more losses because of a planned settlement related to auction-rate securities.
On the New York Mercantile Exchange, light sweet crude for September delivery closed down $1.56 at $113.01 a barrel. This was the lowest level for the U.S. energy benchmark since May 2 and more than $34, or 23%, below its all-time high of $147.27 on July 11.