New York: Wall Street skidded at the opening on Tuesday amid investor jitters about the spread of swine flu and reports suggesting that big US banks might need further capital to shore up their finances.
The Dow Jones Industrial Average dropped 84.35 points (1.05%) to 7,940.65 in the first trades, extending losses from Monday’s modest sell-off.
The Nasdaq composite shed 16.35 points (0.97%) to 1,663.06 and the Standard & Poor’s 500 broad-market index retreated 10.39 points (1.21%) to 847.12.
Trading was nervous as world health officials ratcheted up their alert level as the number of people killed by the swine flu reached more than 150 in Mexico.
Adding to investor jitters was a Wall Street Journal report that the Federal Reserve has advised Citigroup and Bank of America that they need to strengthen their capital following “stress tests” conducted by authorities.
The market slumped “as investors worry that stress test results will reveal capital shortfalls at major financial institutions and that the swine flu outbreak will hurt the global economy,” said Chris Lafakis at Moody’s Economy.com.
“Other US financial institutions might also need to raise capital. Investors are selling bank shares before 4 May, when the stress test results will be released.”