Dismal Outlook For Banks Leads To Stock Slump
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American stocks fell yesterday for the first time in four days on a worsening outlook for bank profits, an unexpected drop in durable goods orders, and concern that financing for buyouts will collapse. Citigroup Inc. tumbled the most in the Dow Jones Industrial Average and led financials to their biggest retreat in almost two weeks after Oppenheimer & Co.’s Meredith Whitney said the largest American bank’s quarterly loss will be four times bigger than previously forecast. Deere & Co. and United Technologies Corp. declined on the government’s report showing the worst-ever slump in machinery demand. Clear Channel Communications Inc. posted its steepest decrease since 1989 on concern banks will pull loans for the broadcaster’s $19.5 billion takeover.
“The challenges and headwinds financials face now are many and have direct implications for the average consumer,” the chief executive officer and portfolio manager at Knott Capital Management, Michael Barron, said.
