JPMorgan, the second-largest U.S. bank by market value, dropped the most since 2002 after saying trading conditions have ``substantially deteriorated.'' Goldman Sachs Group Inc. had its worst decline in five months as Deutsche Bank AG analyst Mike Mayo and Oppenheimer & Co.'s Meredith Whitney cut profit estimates for the biggest securities firm.
The Standard & Poor's 500 Index slid 15.73 points, or 1.2 percent, to 1,289.59. The Dow Jones Industrial Average decreased 139.88, or 1.2 percent, to 11,642.47. The Nasdaq Composite Index slipped 9.34, or 0.4 percent, to 2,430.61. Two stocks dropped for each that rose on the New York Stock Exchange.
The S&P 500 has slumped 18 percent from its 2007 record as global credit losses, accelerating inflation and record fuel prices curb profit growth. Second-quarter earnings fell 23 percent for the 430 companies in the S&P 500 that released results since July 8, according to data compiled by Bloomberg. Financial industry earnings are down 91 percent.
Benchmark indexes extended losses after Freddie Mac said it will stop buying subprime loans issued in New York state and the Dallas Morning News reported that Dallas Federal Reserve Bank President Richard Fisher said the current financial turmoil is worse than the savings and loan crisis of the late 1980s and early 1990s.
JPMorgan lost 9.5 percent to $37.92 after saying it expects the global economy ``to continue to be weak, for capital markets to remain under stress and for a continued decline in U.S. housing prices,'' according to a regulatory filing yesterday. ``Sharply widened'' spreads on mortgage-backed securities and loans have caused losses, the bank said.
Utilities in the S&P 500 dropped 2.1 percent as a group. Constellation Energy Group Inc., the biggest U.S. power marketer, lost 16 percent to $61.25 after increasing its estimated collateral obligations related to possible credit-rating downgrades.
The Nasdaq Composite fell less than the Dow and S&P 500, helped by gains in Biogen Idec Inc. Billionaire investor Carl Icahn increased his stake in the biotechnology company to 6 percent and said he'll keep up talks on ``value.'' Biogen shares increased 2.9 percent to $52.21.
U.S. retail sales growth slowed for the first time in four weeks as consumers curtailed back-to-school spending because of higher food and gasoline costs. Sales at stores open at least a year rose 2.6 percent last week from a year earlier, the International Council of Shopping Centers said today.
Raw material producers added 0.5 percent for the steepest advance among 10 S&P 500 industries. Monsanto Co. rose 3.3 percent to $111.48 and contributed the most to the industry group's advance after saying profit growth from corn seeds may increase faster than previously estimated as farmers sow more of the crop.