Citigroup Inc. and Bank of America Corp. retreated after the shares jumped more than 19 percent yesterday on the Treasury’s plan to purge toxic assets from banks. Southern Co. led a gauge of utilities to a 2.2 percent drop amid concern the U.S. will levy fees on fossil-fueled power plants. Walt Disney Co. slumped 3.3 percent following a downgrade by Goldman Sachs Group Inc., which said the stock is expensive.
The Standard & Poor’s 500 Index lost 2 percent to 806.29 a day after its fourth-biggest rally since the 1930s. The Dow Jones Industrial Average slid 115.65 points, or 1.5 percent, to 7,660.21. The Nasdaq Composite fell 2.4 percent. Four stocks dropped for each that rose on the New York Stock Exchange. Thirty-year Treasury bonds gained, snapping a three-day decline.
The S&P 500 jumped 7.1 percent yesterday, extending its rebound from a 12-year low on March 9 to 22 percent, on speculation the U.S. plan to finance purchases of toxic assets will spur growth. Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Timothy Geithner called today for new powers to take over and dismantle failing financial firms after the troubled rescue of American International Group Inc.