Stocks are still sliding following a Conference Board report that its March index of leading economic indicators has fallen 0.3%.
Stocks are still sliding following a Conference Board report that its March index of leading economic indicators has fallen 0.3 percent.
Economists expected the reading from the private research group would fall 0.2 percent. The index is designed to forecast economic activity for the next three to six months.
Stocks are slumping Monday as investors worry about the problems that banks are facing with rising levels of bad debt.
The Dow Jones industrial average is down 184 points at the 7,948 level, about where it was before the report came out. The Standard & Poor's 500 index is down 23 at 847. The Nasdaq composite index is down 43 at 1,630.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
NEW YORK (AP) — Investors are having doubts about banks' profit reports, and wondering whether their better-than-expected performance mask larger problems with bad debt.
Stocks fell sharply early Monday as investors sold financial stocks and looked to lock in profits after a six-week rally. The major indexes slid about 2 percent, including the Dow Jones industrial average, which fell 175 points.
Worries about the financial industry overshadowed Oracle Corp.'s announcement that it would acquire Sun Microsystems Inc. for $7.4 billion and a $6 billion bid by PepsiCo Inc. to acquire its two biggest bottlers.
The news came at the start of the busiest week yet for results from the first three months of the year. Investors are looking for signals that a rally from 12-year lows in early March can continue. Wall Street has been emboldened by early signals that the economy could be stabilizing, but after a 24 percent surge in the Dow Jones industrial average some investors are asking whether the market has risen too quickly.
Joe Saluzzi, co-head of equity trading at Themis Trading LLC, said traders are now viewing bank earnings with more skepticism amid concerns that even the better-than-expected results are disguising problems. Income from trading and low-cost borrowing rates have boosted results but not erased more difficult problems with bad debt, he said.
"They're looking at bank numbers and are saying they are not that great," Saluzzi said.
In the first hour of trading, the Dow fell 176.58, or 2.2 percent, to 7,954.75.
Broader stock indicators also lost ground. The Standard & Poor's 500 index fell 19.94, or 2.3 percent, to 849.66, and the Nasdaq composite index fell 39.87, or 2.4 percent, to 1,633.20.
Concerns about the sustainability of bank earnings weighed on financial stocks. Bank of America said earned more than expected in the first quarter but also that it set aside $13.4 billion to cover losses on souring debt. The stock fell 10.6 percent.
Citigroup Inc. fell 10.6 percent, while JPMorgan slipped 4.3 percent.
