Stocks fall sharply as banks, tech sectors take a beating
Steep losses in financial, technology and other companies sent U.S. stocks sharply lower in afternoon trading Monday, pulling the Dow Jones industrial average down 400 points. The decline followed drops in Europe and set the market on course for its second big loss in a row. Crude oil prices slumped again.
KEEPING SCORE: The Dow Jones industrial average fell 396 points, or 2.5 percent, to 15,808 as of 2:32 p.m. Eastern Time. Shortly before that, it was down as much as 401 points. The Standard & Poor's 500 lost 46 points, or 2.5 percent, to 1,833. The Nasdaq composite dropped 131 points, or 3 percent, to 4,231.
THE QUOTE: "Traders are worried that the financial market weakness that we're experiencing is going to lead to weakness in the real economy," said Jim McDonald, chief investment strategist at Northern Trust.
TURBULENT MARKET: Several factors have investors in a selling mood this year, including falling crude oil prices and the economic slowdown in China and elsewhere. Traders will be monitoring several big company earnings this week to see what management teams say about their prospects for future earnings.
SECTOR VIEW: All 10 sectors in the S&P 500 index lost ground. Materials companies fell the most, 3.9 percent. Banks and other financial companies, consumer discretionary and technology stocks also fell sharply.
BIG DROP: Natural gas companies Chesapeake Energy and Williams Cos. topped the list of decliners in the S&P 500. Chesapeake slumped $1.01, or 33 percent, to $2.05. Trading in Chesapeake was halted earlier amid speculation the company was preparing to file for bankruptcy protection. Chesapeake issued a statement around midday saying it currently has no plans to pursue bankruptcy. Williams slid $6.27, or 36.6 percent, to $10.85.
FICKLE ABOUT FINANCIALS: Credit Suisse Group AG and Goldman Sachs Group were down sharply in afternoon trading. Goldman lost 6.9 percent, the biggest drop in the Dow. The stock shed $10.76 to $145.71. Credit Suisse slid 5 percent on news that the bank's new CEO has asked for his bonus to be cut following a report of a huge fourth-quarter loss and plans for 4,000 job cuts. The stock fell 75 cents to $14.20.
ROUGH QUARTER: Cognizant Technology Solutions sank 7.8 percent after forecasting earnings and revenue that were well below what analysts were expecting. The stock shed $4.56 to $53.98.
IN TROUBLE: Harman International Industries was down 5.8 percent on news that a former executive at the car audio and video systems' maker has been charged with insider trading by federal prosecutors. The stock lost $4.08 to $66.61.
GOING PRIVATE: Apollo Education Group vaulted 20.1 percent after agreeing to be acquired by a consortium led by investment firm The Vistria Group. The firm aims to take the for-profit college operator private. The stock gained $1.40 to $8.35.
DEAL ACTION: GoPro climbed 10.8 percent after the high-definition camera company signed a patent licensing deal with Microsoft Corp. for file storage technology. GoPro added $1.08 to $11.04.
MARKETS OVERSEAS: Among Europe's main indexes, Germany's DAX fell 3.3 percent, while France's CAC 40 dropped 3.2 percent. The FTSE 100 index of leading British shares slid 2.7 percent. In Asia, many markets were closed for the Lunar New Year holidays. Japan's benchmark Nikkei 225 rose 1.1 percent, while Australia's S&P/ASX 200 was flat.
ENERGY: Benchmark U.S. crude oil fell $1.20, or 3.9 percent, to close at $29.69 a barrel in New York. Brent crude, a benchmark for international oils, dropped $1.24, or 3.6 percent, to $32.79 a barrel in London.
BONDS AND CURRENCIES: Bond prices rose. The yield on the 10-year Treasury note fell to 1.74 percent from 1.84 percent late Friday. The euro was up at $1.1188 while the dollar fell to 115.39 yen.