Hewlett-Packard Co. and Intel Corp. slid at least 5.4 percent as Morgan Stanley said technology shares are the most vulnerable among economically sensitive industries. U.S. Steel Corp. helped lead a tumble in steelmakers after UBS AG said the group has raised output too quickly. Bank of America Corp. rose 3.2 percent and Citigroup Inc. climbed 9.7 percent as concern eased that the U.S. government will seize control of the lenders.
The S&P 500 lost 3.5 percent to 743.33, its lowest close since April 1997. The six-day losing streak in the U.S. stock benchmark ranks as its longest since October. The Dow Jones Industrial Average tumbled 250.89 points, or 3.4 percent, to 7,114.78, its lowest since May 1997. The Russell 2000 Index lost 4 percent.
Bank of America and Citigroup, each with slides exceeding 68 percent this year, have dragged the S&P 500 to an 18 percent decline in 2009, the worst start to a year on record. The losses came as President Barack Obama and Treasury Secretary Timothy Geithner failed to assuage investor concerns with an $787 billion economic stimulus plan comprised of tax breaks and government spending.
Financial shares led the market higher at the open, rising as much as 4.6 percent collectively, after U.S. regulators said they will begin examining which banks have enough capital to survive a deeper recession. Banks that need more funds after so- called stress tests and cannot raise the money from private investors will be able to tap taxpayer funds.
Losses of at least 11 percent in shares of Nucor Corp., U.S. Steel Corp. and AK Steel Holding Corp. pushed a group of raw- materials producers in the S&P 500 to a 6.2 percent tumble, the most among 10 industries.