JPMorgan dropped 14 percent as lenders led the plunge. Wells Fargo & Co. and Bank of America Corp. slumped 12 percent after Moody’s said it’s reviewing their ratings, while Citigroup slipped below $1 for the first time. General Motors Corp. sank 15 percent after its auditor said the automaker may not survive. European stocks fell after Aviva Plc, the biggest U.K. insurer, reported a loss.
The S&P 500 lost 4.3 percent to 682.60 at 4:02 p.m. in New York. The Dow Jones Industrial Average decreased 280.52 points, or 4.1 percent, to 6,595.32. Europe’s Dow Jones Stoxx 600 Index fell 3.6 percent to 161.59. Treasuries rallied, driving the yield on 10-year notes down to 2.81 percent from 2.97 percent, and the U.S. dollar index climbed 0.6 percent.
Concern corporate defaults will rise, the deepening global recession, and dividend cuts at companies from General Electric Co. to JPMorgan have dragged the S&P 500 to three consecutive weeks of declines, pushing the index down 24 percent this year. It has fallen 7.2 percent since Feb. 27.
Stocks rallied yesterday for the first time since Feb. 24 on speculation China would broaden efforts to boost growth and U.S. lawmakers will reach agreement on a plan to stem mortgage defaults. Chinese Premier Wen Jiabao said today the country’s 8 percent growth target for this year is within reach, indicating the government doesn’t see the need to increase a 4 trillion yuan ($585 billion) economic stimulus.