Renewed credit concerns knocked down shares of the major US banks on Tuesday, driving the Dow and S&P 500 lower, and offsetting a decline of $1 in the price of the barrel of US crude oil. J.P. Morgan Chase & Co's shares slumped nearly 7 percent, becoming the biggest drag on both the Dow and the S&P 500, after the third-largest US bank said it had taken another $1.5 billion of write-downs in the current quarter to date.
The J.P. Morgan news suggested the fallout from the housing downturn is far from over, weighing on the entire financial sector. Citigroup lost over 3 percent and Bank of America fell 3 percent. Shares of Goldman Sachs, which also received negative comments from analysts, dropped nearly 5 percent.
Wachovia sank almost 9 percent after it increased its previously reported second-quarter loss. The Dow Jones industrial average fell 86.22 points, or 0.74 percent, to 11,696.13, while the Standard & Poor's 500 Index lost 8.41 points, or 0.64 percent, to 1,296.91.
The Nasdaq Composite Index declined 3.22 points, or 0.13 percent, to 2,436.84. J. P. Morgan shares slid 6.8 percent to $39.05, Citigroup shares fell 3.6 percent to $19.09, and Bank of America declined 3.2 percent to $32.31. The KBW bank index lost 3.5 percent, after gaining more 45 percent since its mid-July lows.
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