US stocks fall amid banking concerns
Updated: 2007-11-20 09:18
Broader stock indicators also declined. The S&P 500 index fell 25.47, or 1.75 percent, to 1,433.27, and the Nasdaq composite index fell 43.86, or 1.66 percent, to 2,593.38.
The Russell 2000 index of smaller companies fell 19.17, or 2.49 percent, to 750.33. The pullback left the Russell firmly in negative territory for the year, with a drop of 4.74 percent. Investors often view smaller companies as more likely to be hard hit in a slowing economy because they might not as easily get by on thin profit margins as would some big companies with overseas operations.
With Monday's decline, stocks have seen losses in seven of the past eight sessions. Last week, stocks ended higher after a string of volatile sessions. Many traders are wondering whether the major indexes will test the lows for the year that came in August.
Government bond prices rose sharply Monday as investors sought safety. The yield on the 10-year Treasury note, which moves opposite its price, fell to 4.08 percent from 4.15 percent late Friday. The 10-year note hasn't gone below the 4.1 percent level since September 2005.
The dollar fell against other major currencies and gold prices slipped.
Crude oil futures for January delivery rose 80 cents to settle at $94.64 per barrel on the New York Mercantile Exchange.
John Merrill, chief investment officer at Tanglewood Capital Management in Houston, contends investors are still grappling with the scope of the writedowns related to the housing market and the related ramifications, such a more cautious consumer.
"Certainly in the financial sector the concerns seem to be never-ending. The potential for write-offs seems to keep growing," he said. "This is having to settle in and the process of settling in means you become more aware of how more meaningful and how restricting these writedowns are."
One big area of concern for investors was again Citigroup, which said earlier this month it would likely write down $8 billion to $11 billion in the fourth quarter. The bank, one of the 30 stocks that makes up the Dow industrials, fell $2, or 5.9 percent, to $32 after the Goldman downgrade to a "sell" rating.
Among other financial-services companies, Merrill Lynch & Co. fell $2.24, or 4 percent, to $53.87, while Morgan Stanley fell $1.77, or 3.4 percent, to $51.13.
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