February 10, 2009 / 7:32 PM / 9 years ago

RPT-US STOCKS-Bank plan skepticism sinks Wall St

  (Repeats to additional subscribers with no change to text)
 * Bank plan misgivings rattle investors
 * Bernanke says liquidity expansion no panacea
 * All 30 Dow components fall
 * Dow off 4.2 pct; S&P 500 off 4.4 pct; Nasdaq off 3.6 pct
 (Updates to mid-afternoon)
 By Rodrigo Campos
 NEW YORK, Feb 10 (Reuters) - U.S. stocks tumbled on Tuesday
with the Dow and the S&P 500 down more than 4 percent, as bank
shares slid on concerns that a plan to shore up the financial
sector may not be enough to loosen up credit and contain the
deepening recession.
 Indexes slumped immediately following Treasury Secretary
Timothy Geithner's announcement of a plan to mop up $500
billion in spoiled assets from the beleaguered banking system.
 Financial stocks, which had spearheaded a rise in the
market in recent sessions in anticipation of the plan, skidded
as the lack of details in Treasury's announcement raised
questions about whether the plan will be enough to rein in the
financial crisis.
 The KBW Banks index .BKX tumbled 12.2 percent and the S&P
financial index .GSPF slid 8.9 percent.
 Geithner did not provide enough "new information and maybe
that is what the market doesn't like. There was a grand
build-up, but content was not as dramatic," said Stephen Wood,
senior portfolio strategist at Russell Investments in New
 "There is an inability to price these assets in a way that
is acceptable, so we're kind of where we were over a year
 Federal Reserve chairman Ben Bernanke offered the market
little solace as he said the central bank's liquidity expansion
was no "panacea."
 The Dow Jones industrial average .DJI tumbled 348.30
points, or 4.21 percent, to 7,922.57. The Standard & Poor's 500
Index .SPX declined 38.20 points, or 4.39 percent, to 831.69.
The Nasdaq Composite Index .IXIC slid 57.35 points, or 3.60
percent, to 1,534.21.
 All 30 components of the Dow Industrials were negative, as
were the 10 sectors of the S&P 500.
 Shares of Bank of America BAC.N slid more than 15 percent
to $5.84, while JPMorgan JPM.N shed 5.8 percent to $25.70 and
shares of Citigroup C.N were down 9.9 percent at $3.56.
 Insurers were another standout casualty. Shares of U.S.
property and life insurer Hartford Financial Services Group
HIG.N slid 11.7 percent to $13.27 after its credit ratings
were cut. Rival MetLife MET.N, the No. 1 U.S. life insurer,
was down 9.6 percent to $28.28.
 Principal Financial PFG.N, another insurer, tumbled 27.7
percent to $12.31. Like the banks, insurers are saddled by
money-losing assets on their books.
 Boeing BA.N was one of the top drags of the Dow as it
reiterated the delay in the delivery of its latest jetliner,
sending its stock down near 6 percent to $40.27.
 McDonald's MCD.N shares fell 3.2 percent to $57.12 and
Wal-Mart WMT.N shed 2.7 percent to $47.96, reflecting
concerns about the spending environment. Citigroup cut its
earnings estimate on Wal-Mart, and the top retailer later in
the day said it was cutting up to 800 jobs.
 Home builder MDC Holdings Inc MDC.N reported results that
missed Wall Street expectations, and its shares fell 10 percent
to $31.82. The Dow Jones home construction index .DJUSHB
tumbled 6.6 percent.
 (Editing by Tom Hals)

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