US stocks decline most in two months on bank, energy retreat
Tuesday, 8 September 2009
NEW YORK, Sept. 7 (Bloomberg): US stocks fell the most in two months this week, led by financial and energy companies, amid concern banks have surged more than their earnings prospects warrant and lower oil prices. Equities rallied yesterday as the pace of job losses slowed.
Morgan Stanley lost 6.3 per cent this week after Bank of America Corp. cut its rating following an 84 per cent rally this year. American International Group Inc. plunged 20 per cent on Sanford C. Bernstein & Co.'s recommendation to sell the shares, which jumped 245 per cent in August. Exxon Mobil Corp. fell as crude oil slid 6.5 per cent after China said it would implement stricter capital rules for banks, spurring speculation growth will cool in the second-largest energy-consuming nation.
The Standard & Poor's 500 Index fell 1.2 per cent to 1,016.40, paring its 2009 gain to 13 per cent. The Dow Jones Industrial Average dropped 102.93 points, or 1.1 per cent, to 9,441.27. The Nasdaq Composite Index lost 0.5 per cent to 2,018.78. Markets are closed Sept. 7 for the Labor Day holiday.
"At some point you need a gut check on some of those companies like AIG that people are just buying because they're going up," said Scott Tapley, who helps oversee $2.5 billion at 1st Source Investment Advisors Inc. in South Bend, Indiana. "People are picking companies they think can survive and just buying, and at some point you have to pause and wait for confirmation of real earnings."
Financial shares, which have more than doubled in the last six months, lost 3.6 per cent for the biggest retreat among 10 industry groups in the S&P 500 as 75 of 79 companies declined. Energy companies fell 2 per cent for the second-biggest loss.
Morgan Stanley lost 6.3 per cent this week after Bank of America Corp. cut its rating following an 84 per cent rally this year. American International Group Inc. plunged 20 per cent on Sanford C. Bernstein & Co.'s recommendation to sell the shares, which jumped 245 per cent in August. Exxon Mobil Corp. fell as crude oil slid 6.5 per cent after China said it would implement stricter capital rules for banks, spurring speculation growth will cool in the second-largest energy-consuming nation.
The Standard & Poor's 500 Index fell 1.2 per cent to 1,016.40, paring its 2009 gain to 13 per cent. The Dow Jones Industrial Average dropped 102.93 points, or 1.1 per cent, to 9,441.27. The Nasdaq Composite Index lost 0.5 per cent to 2,018.78. Markets are closed Sept. 7 for the Labor Day holiday.
"At some point you need a gut check on some of those companies like AIG that people are just buying because they're going up," said Scott Tapley, who helps oversee $2.5 billion at 1st Source Investment Advisors Inc. in South Bend, Indiana. "People are picking companies they think can survive and just buying, and at some point you have to pause and wait for confirmation of real earnings."
Financial shares, which have more than doubled in the last six months, lost 3.6 per cent for the biggest retreat among 10 industry groups in the S&P 500 as 75 of 79 companies declined. Energy companies fell 2 per cent for the second-biggest loss.