Thursday, January 20, 2011
Associated Press
NEW YORK
Stocks suffered their largest one-day decline since November after financial companies reported steep drops in profits Wednesday.
Goldman Sachs Group Inc. said its earnings fell 53 percent in the last quarter because of a slowdown in its trading and investment banking businesses. Northern Trust and State Street also reported lower profits.
Goldman Sachs, Bank of America Corp., JPMorgan Chase & Co. and Visa Inc. each fell by more than 2 percent.
“Banks are under pressure right now because they are not making money in places where you’d expect to see trading gains,” said Quincy Krosby, a market strategist at Prudential Financial. Financial companies had rallied by more than 5 percent over the past month.
The Standard and Poor’s 500 fell 13.1, or 1 percent, to 1,281.92. It was the biggest percentage drop in the benchmark index since Nov. 23. The Nasdaq composite fell 40.49, or 1.5 percent, to 2,725.36.
The Dow Jones industrial average of large companies held up better, partly due to a large gain in one of its 30 components, IBM Corp. IBM jumped $5.04 to $155.69 after reporting a big jump in earnings.
The Dow lost 12.64 points, or 0.1 percent, to 11,825.29.
Small companies fell the most. The Russell 2000 slumped 2.6 percent, its worst percentage loss since Aug. 19, 2010.
Losses were spread across the market. Each of the 10 company groups that make up the S&P 500 index lost ground.
American Express Co. fell 2.4 percent after the company said it would close a service center in North Carolina and cut 550 jobs.
Bond prices rose, sending their yields slightly lower. The yield on the 10-year Treasury note fell to 3.34 percent from 3.37 percent late Tuesday.
Four stocks fell for every one that rose on the New York Stock Exchange. Volume came to 1.1 billion shares.