Stocks lower as tech worries outweigh bank news
NEW YORK -- Losses in technology shares dragged stocks lower Monday even as the government announced its latest plans for shoring up ailing U.S. banks.
Financial stocks, which led the market in the early going, were mostly higher after the government's latest pledge that it plans more aid for the banking system. The Treasury and other departments said in a joint statement, "the U.S. government stands firmly behind the banking system during this period."
"It's only a very partial picture of what we may get," said Quincy Krosby, chief investment strategist at The Hartford. "This proverbial lack of clarity is damaging market psychology."
"There's no where to hide anymore," said Jim Herrick, director of equity trading at Baird & Co.
Federal regulators said Monday they will launch a revamped program that includes the option of increasing government ownership in financial institutions without having to pour more taxpayer money into them. That would be done through a technical change converting the status of the government's shares.
When the overall number of common shares is increased, that would reduce the value of existing shares. But it would leave the bank in private hands and investors seemed to welcome the report because it reduced some uncertainty.
Bond prices fell Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.80% from 2.79% late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.27% from 0.26% Friday.
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