Dow Falls 1.2% to 7465.95
By PETER A. MCKAY
Stocks slumped to new lows as worries about the economy and the financial sector continued to keep investors on the sidelines.
After coming close twice this week, the Dow Jones Industrial Average set a new bear-market low, finishing down 89.68 points, or 1.2%, at 7465.95, more than 86 points below its close on Nov. 20. It was the Dow's lowest close since Oct. 9, 2002, the trough of the previous bear market.
"You just don't see a lot of conviction from anyone in this market right now," said floor trader Alan Valdes of Hilliard Lyons, a New York brokerage. "We have clients right now who will hold off buying a stock for $10 because they figure it will be $8 next week."
Bank of America and Citigroup both closed down 14%. Citi's closing price of $2.51 was the lowest since 1991; its shares have fallen nearly 63% so far this year.
American Express fell 8.7% to $12.87, its lowest close since 1996; it accounted for nearly 10 points of the Dow's decline.
Technology shares also tumbled after Hewlett-Packard reported disappointing earnings. Its shares were down 7.9%, contributing more than 21 points to the Dow's decline.
The Standard & Poor's 500 index slid 1.2% to 778.94, its lowest close since 752.44 on Nov. 20. Its financial sector was down 5.3%. A month of bearish options trading is weighing on bank stocks as options expiration looms Friday.
Oil futures staged their biggest rally this year, jumping 14% to $39.48 a barrel after the government reported a surprising drawdown in crude-oil inventories.
