After closing out the worst quarter since the depths of the financial crisis in 2008, stocks fell sharply again today on worries over Europe’s debt crisis. Shares of U.S. banks took another beating with Citibank down 9.8 percent and Bank of America down 8.3 percent.
The Dow Jones industrial average finished the third quarter Friday with a 12 percent loss to 10,913 — the broader S&P 500 did even worse, declining 14 percent. Investors sold shares on concerns that the economy may fall into another recession, European banks and government are on shaky financial ground and the U.S. government won’t be able to tame its growing budget deficit.
“News that Greece will miss its deficit-reduction targets — again — have markets on edge,” Sal Guatieri, an analyst at BMO Capital Markets, told the Associated Press.
After opening sharply down, stocks recovered somewhat on news that manufacturing in the U.S. ticked up in August. The Institute for Supply Management’s factory index rose to 51.6 for the month, and construction spending edged up 1.4 percent, the Commerce Department reported. But it was all downhill after that.
The Dow Jones industrial average fell 258 points to 10,665 at 4 p.m. New York time. The S&P 500 fell 32 points or 2.8 percent to 1099. For the year, the Dow is down just over 8 percent. The S&P fell to its closing low for the year.
American Airlines fell 33 percent to under $2 a share, the biggest decline in a decade, on fears the carrier will seek bankruptcy protection.
Shares in Europe fell with London’s FTSE down 1 percent and the German Dax off 2.1 percent. Overnight, Japan’s Nikkei declined 1.8 percent. Gold rose $32 to $1,665 an ounce in New York trading.