U.S. stocks fell sharply today as concerns over credit at big banks weighed on sentiment and investors took a breather after six weeks of pushing prices higher.
The Dow Jones industrial average declined 289.60 points, or 3.56%, to close at 7,841.73; the S&P 500 index closed down 37.21 points, or 4.28%, at 832.39; and the Nasdaq composite index slid 64.86 points, or 3.88%, to end the session at 1,608.21.
Financial stocks led today’s decline despite better-than-expected earnings from Bank of America Corp. as investors focused on rising credit losses and uncollectible loans. Weakness in the financial sector overpowered a batch of mergers and acquisitions news, led by Oracle’s surprise deal to buy Sun Microsystems for $7.4 billion after talks between IBM Corp. and Sun broke down last week.
In addition, Pepsico Inc. offered $6 billion for the remaining stakes in its two largest bottlers, Pepsi Bottling Group and PepsiAmericas Inc., and drugmaker GlaxoSmithKline announced plans to buy privately owned Stiefel Laboratories Inc. for up to $3.6 billion.
Last week, the S&P 500 gained 1.5%, its sixth straight weekly gain.
