Wall St drops as financials fall in late sell-off

Wall St drops as financials fall in late sell-off

New York: US stocks fell on Wednesday, hurt by a late sell-off in financial shares after an influential bank analyst recommended selling Wells Fargo shares and a wider-than-expected loss from Boeing disappointed investors.

For most of the session, stocks had traded higher as the US dollar’s weakness underpinned shares of natural resources companies, while results from Morgan Stanley and Yahoo Inc added to optimism about corporate profits.

Shares of Wells Fargo slid 5.1% to $28.90 after Rochdale Research analyst Richard Bove cut his rating on the stock saying loan losses were mounting. The KBW bank indexdropped 2.4%.

“It just shows you how susceptible we are to bad news right now," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco. “We’ve got such an extended stock market that a feather of news is enough to cascade it down 100 points."

The Dow Jones industrial average dropped 92.12 points, or 0.92%, to end at 9,949.36. The Standard & Poor’s 500 Index lost 9.66 points, or 0.89%, to 1,081.40. The Nasdaq Composite Index shed 12.74 points, or 0.59%, to 2,150.73.

Earlier in the day, Wells Fargo had been among several banks, including Morgan Stanley and US Bancorp, posting quarterly earnings above Wall Street’s forecasts.

But the market took a turn for the worst in the last half-hour of the session, causing indexes to finish at their lows of the day.

Besides Wells Fargo, other notable casualties in the bank sector were JPMorgan, down 3% at $44.65 and Bank of America, off 2.9% at $16.51. But Morgan Stanley bucked the trend, ending up 4.8% at $34.08 following its forecast-beating results.

Boeing shares dropped 2.4% to $50.63 following a wider-than-expected quarterly loss from the aircraft maker.

Wal-Mart Stores also lost ground, ending down 2.1% at $50.63, after the world’s largest retailer said it would slash prices as it readies for what is likely to be a tough holiday shopping season.

Biotechnology company Genzyme Corp was the Nasdaq’s top drag after it posted lower-than-expected quarterly earnings and cut its 2009 outlook. The stock fell 6.2% to $51.43.

On the positive side, Apple Inc hit an all-time intraday high, two days after the iPhone and MacBook computer maker posted earnings that eclipsed Wall Street’s forecasts. Apple ended up 3.1% at $204.92 on Nasdaq, where it rose as high as $208.71 earlier.

US front-month crude briefly hit $82 a barrel on the New York Mercantile Exchange, while spot gold rose above $1,060 an ounce as the euro soared above $1.50 for the first time since August 2008. US December crude-oil futures, the new front-month contract, jumped 2.8%, or $2.25, to settle at $81.37 a barrel on the New York Mercantile Exchange.