Stocks dropped for a third straight session today as investors continued to take profits amid ongoing concerns over President Barack Obama’s plan to restrict banks’ lines of business and lower-than-expected corporate earnings.
After losing 213 points on Jan. 21 and 122 points on Jan. 20, the Dow Jones industrial average fell another 216.90 today, or 2.09%, to close at 10,172.28 The S&P 500 index fell 24.75 points, or 2.22%, to 1,091.73, and the Nasdaq composite index shed 60.41 points, or 2.67% to 2,205.29. All figures are preliminary.
Selling picked up toward the end of the session as Mr. Obama began a town hall meeting to discuss his plan to impose new limits on bank’s trading activities. His initial announcement of the plan on Jan. 21 sent investors quickly to the exits.
Adding to that worry was increasing uncertainty over Federal Reserve Chairman Ben S. Bernanke’s confirmation for another term as head of the central bank.
Financial stocks once again led today’s decline but technology companies also posted stiff losses amid investor concern that earnings, while solid, have not been as strong as expected.
For example, tech bellwether Google reported a surge in fourth-quarter profits but sales in the period missed the most optimistic estimates. Google shares slumped nearly 6%.
The market’s late-January slide was worrisome to some analysts.
“Every down January since 1950 was followed by a new or continuing bear market, a 10% correction or a flat year,” Jeffrey Hirsch, editor-in-chief of the Stock Trader's Almanac 2010, told Pensions & Investments’ sister publication InvestmentNews.