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 York.
 “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 ago.”
 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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