Fridays early afternoon trade: Wall Street slides as banks fall

US stocks fell on Friday, as long-standing worries about the health of the banking system resurfaced and a brokerage said American Express may post yearly losses and cut its dividend. General Electric also weighed down the market, as brokers lowered their 2009 profit forecasts for the company.
Financial shares were hit after investors on Thursday applied for less than 2.5 percent of the $200 billion the Federal Reserve pledged to loan through its long-awaited programme to revive consumer and small business lending, known as the Term Asset-Backed Securities Loan Facility (TALF). Shares of J.P. Morgan, down 5.1 percent to $23.67, were a top drag on the Dow.
Bank of America shares fell more than 10 percent to $6.19. Both the KBW Bank index and the S&P financial index dropped more than 5 percent. American Express Co shares tumbled 6.6 percent to $12.20 after analysts at Friedman, Billings, Ramsey said the company may post a loss in 2009 and 2010, hurt by growing unemployment levels and rising credit card defaults.
The Dow Jones industrial average dropped 108.01 points, or 1.46 percent, to 7,292.79. The Standard & Poors 500 Index fell 15.56 points, or 1.98 percent, to 768.48. The Nasdaq Composite Index lost 31.51 points, or 2.12 percent, to 1,451.97.