Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. lost at least 9.4 percent as U.S. markets opened after a three-day weekend. Swedbank AB and UniCredit SpA declined more than 7.3 percent and the euro fell below $1.26 for the first time since early December after Moody’s Investors Service said it may downgrade banks with units in eastern Europe. General Motors Corp. retreated 13 percent before taking its case for more government support to the U.S. Treasury.
The MSCI World Index decreased 3.6 percent to 801.51 at 2:40 p.m. in New York, extending its 2009 retreat to 13 percent. The gauge of 23 developed markets has dropped for six straight days as companies from Electricite de France SA to Diageo Plc posted disappointing results and U.S. Treasury Secretary Timothy Geithner failed to convince investors his bank rescue will work.
The Standard & Poor’s 500 Index decreased 3.8 percent to 795.60, dropping below 800 for the first time since November, as manufacturing in New York contracted at the fastest pace on record. Financial stocks slipped 7.7 percent for the biggest drop among 10 industry groups. Concern that a deepening U.S. recession will curb fuel demand pushed oil below $35 a barrel.
The MSCI Emerging Markets Index declined 5 percent. Russia’s Micex Index lost 9.4 percent, with the decline triggering a trading halt. The Czech Republic’s PX Index tumbled 6.8 percent, the steepest drop since October.
Europe’s Dow Jones Stoxx 600 Index sank 2.5 percent as Givaudan SA and Yara International ASA fell. Austria’s ATX Index decreased 8.3 percent after Moody’s said the country’s banking system is the most exposed” to the deteriorating economies in east and central Europe.
The MSCI Asia Pacific Index dropped 3.1 percent. In Japan, where Finance Minister Shoichi Nakagawa said he will resign amid accusations he was drunk at a Group of Seven press conference, the Nikkei 225 Stock Average lost 1.4 percent.