NEW YORK (CNNMoney.com) -- Stocks tanked Monday as Goldman Sachs' dour outlook on the financial sector and a weak report on home builder confidence sparked a broad market selloff.
After the close, Hewlett-Packard reported quarterly sales and revenue that topped expectations. Shares gained 1.4 percent in extended-hours trading.
The Dow Jones industrial average lost 218 points, falling below 13,000 for only the second time since the summer. The S&P 500 index lost nearly 1.8 percent. The Nasdaq composite declined almost 1.7 percent.
Small cap stocks were hit harder with the Russell 2000 falling 2.5 percent.
Treasury prices rose, lowering the corresponding yields. Oil prices rose. Gold prices declined.
Goldman Sachs downgraded Citigroup to "sell" from "neutral" Monday and said the bank will likely have to take $15 billion in writedowns over the next two quarters due to bets on risky debt. Citigroup shares fell 5.9 percent.
Goldman also cut its price target on Merrill Lynch , Morgan Stanley and others in the sector.
The comments sent the overall market lower, as investors were reminded that the breadth of the credit market fallout is not really known and could be a lot worse than has been expected.
Goldman Sachs didn't alert Wall Street to anything it didn't already know, but was nonetheless effective in triggering a selloff, said Art Hogan, chief market analyst at Jefferies & Co.
"Every time the issue is brought up and quantified, the market rolls over," Hogan said. "Today is no different."
Weak results and a disappointing forecast from home-improvement retailer Lowe's added to worries about the consumer's ability to keep spending, ahead of Black Friday, the day after Thanksgiving and the unofficial kickoff to the holiday shopping period.
Also weighing on sentiment: more problems for the dollar.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment