US markets: Banks lead early-afternoon decline

10th August 2011

The falls reversed a 4.7% rally in the Standard & Poor's 500 index and other indexes on Tuesday The New York Times reported.

Shares had risen on Tuesday after the Federal Reserve announced it did not expect to raise interest rates for at least two years.

"The market psychology is such that investors no longer seem to know who or what to root for and all that they do know is, according to the Fed, that rates will remain low until the middle of 2013," said Kevin H. Giddis, the executive managing director and president for fixed-income capital markets at Morgan Keegan & Company is quoted as saying.

In the early afternoon, the Dow was down 316.55 points, or 2.82 percent. The Standard & Poor's 500-stock index lost 31.94 points, or 2.72 percent, and the Nasdaq composite index was off 59.53 points, or 2.40 percent.

The Wall Street Journal reported how bank stocks lead the decline.

"Citigroup falling 9.2%, Bank of America off 7.9%, J.P. Morgan Chase down 4.5% and American Express shedding 5.4%."

It added "Walt Disney was the steepest decliner among the Dow components, tumbling 10% after the blue-chip media and entertainment conglomerate reported results that topped analyst expectations, but raised analyst concerns about decelerating advertising rate growth."

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