The Dow Jones industrial average was down 120.96 points, or 0.91 percent, to end unofficially at 13,110.05. The Standard & Poor's 500 Index was down 19.42 points, or 1.32 percent, to finish unofficially at 1,451.16. The Nasdaq Composite Index was down 25.81 points, or 0.98 percent, to close unofficially at 2,618.51.
The S&P 500 Financials Index of 93 companies also dropped after Deutsche Bank AG, Germany's biggest bank, lost an effort to foreclose on 14 properties because a federal judge in Cleveland found the bank hadn't proved that investors in the underlying mortgages actually owned them. The ruling, if adopted by other federal courts, may complicate efforts by investors in mortgage securities to foreclose on non-paying loans.
The fallout from subprime mortgage defaults has pushed financial shares down 17 percent this year and limited the S&P 500's advance to 2.3 percent. J.C. Penney's results added to concern consumer spending is slowing ahead of the holiday shopping season. Macy's Inc. slashed its sales forecast yesterday and a Commerce Department report showed a 0.5 percent decrease in October department-store sales.