Citigroup Inc. tumbled 14 percent and Bank of America Corp. lost 11 percent as the Standard & Poor's 500 Index and Dow Jones Industrial Average sank more than 5 percent. Nucor Corp., the largest U.S.-based steel producer, slid 10 percent after bigger rival ArcelorMittal doubled production cuts amid slowing demand. Boeing Co., the world's second-largest commercial planemaker, lost 6.9 percent after UBS AG forecast a 3 percent drop in global air traffic next year.
The S&P 500 tumbled 52.96 points, or 5.3 percent, to 952.79, erasing yesterday's 4.1 percent rally. The Dow retreated 486.01, or 5.1 percent, to 9,139.27 and the Nasdaq Composite Index dropped 98.48, or 5.5 percent, to 1,681.64. Twelve stocks fell for each that rose on the New York Stock Exchange.
Canadian stocks dropped, led by energy and financial companies, as falling crude oil prices fed concerns that earnings will decline along with commodities. The Standard & Poor's/TSX Composite Index fell 2 percent to 9,917.37 at 3:51 p.m. in Toronto.
European stocks retreated for the first time in seven days aafter disappointing earnings overshadowed speculation that Barack Obama will boost the economy with a stimulus package.
National benchmark indexes fell in 16 of the 18 western European markets. The U.K.'s FTSE 100 slid 2.3 percent and France's CAC 40 lost 1.98 percent as BNP Paribas SA dropped after the bank said third-quarter profit fell 56 percent. Germany's DAX decreased 2.11 percent with Q-Cells SE tumbling 15 percent after Deutsche Bank recommended selling the stock.
Japan stocks extended a record rally from a 26-year low on speculation U.S. president-elect Barack Obama will take additional steps to spur economic growth and as a rise in commodities prices sparked gains by resource companies. The Nikkei 225 Stock Average rose 406.64, or 4.5 percent, to close at 9,521.24 in Tokyo.
Australian S&P/ASX 200 Index advanced 121.50 points, or 2.9 percent, to 4,336.60 at the close in Sydney, its highest since Oct. 8.
Indian stocks dropped for the first time in six days, led by Reliance Industries Ltd. and Tata Steel Ltd. and on speculation recent gains were overdone. The benchmark Bombay Stock Exchange Sensitive Index, or Sensex, lost 511.11, or 4.8 percent, to 10,120.01.
China's stocks rose the most in three weeks, led by financial and energy companies, on speculation Barack Obama will take steps as U.S. president to bolster the world's largest economy and as oil and metals prices jumped. The CSI 300 Index, tracking yuan-denominated A shares on China's two exchanges, gained 63.66, or 3.9 percent, to 1,691.42 at the close, the biggest advance since Oct. 13.
Russian stocks rose for a sixth day, forcing a halt in trading, on higher oil prices and speculation that Barack Obama's presidency will boost the country's relations with the U.S. The 30-stock Micex Index surged as much as 14 percent, poised for a sixth consecutive day of gains, the longest since President Dmitry Medvedev's inauguration in May.