Trade figures from the world’s two biggest economies, the United States and China, also stoked concerns over the economic outlook, ending a rally in European stocks as well.
The Dow Jones industrial average closed down 40.72 points, or 0.35 percent, at 11,478.13. JPMorgan fell 4.8 percent. Other banks also fell. Citigroup dropped 5.3 percent, Morgan Stanley 4.4 percent and Bank of America 5.5 percent.
JPMorgan is the first big American bank to announce quarterly results. Next week Wells Fargo Company, Citigroup and Morgan Stanley will report. JPMorgan is considered one of the industry’s leaders, so its results do not bode well for other financial companies, said Jason Lilly, a portfolio manager at Rockland Trust Investment Management Group.
An afternoon rally in technology stocks trimmed some of Wall Street’s losses. Yahoo rose 1 percent as investors speculated the company might be bought. The technology-focused Nasdaq composite rose 15.5 points, or 0.6 percent, to 2,620.
“There’s a mounting interest in Yahoo and that has filtered out into tech stocks,” said Quincy Krosby, a market strategist for Prudential Financial.
The S. P. 500 index fell 3.59 points, or 0.3 percent, to 1,203.66. Financial stocks fell 2.4 percent, the most of the 10 company groups that make up the index.
Investors were also disappointed by a report that China’s trade surplus narrowed for a second month in September. That suggests the Chinese economy is slowing more than previously thought, which could hurt demand for exports from the United States.
The United States trade deficit was essentially unchanged in August at $45.6 billion, with exports and imports both slipping. Lower imports are a bad sign for the United States economy, since it shows weakness in demand.
Before Thursday, stocks had soared for a week on signs that Europe was starting to get a handle on its financial crisis. The Dow had rallied 8.1 percent since last Tuesday, when it hit its lowest point of the year. The S. P. Poor’s 500-index rose even more in that time, 9.8 percent. That was the biggest seven-day jump for the S. P. since March 2009, when the market hit 12-year lows.
The sharp highs and lows are typical of the volatility that has plagued markets since August, when investors began reacting to fears that indebted economies in Europe would collapse and the United States would slide back into recession. Many analysts say they think the market is in for more big swings until a resolution to Europe’s debt is reached.
“Europe will definitely contribute to more volatility. That story isn’t done,” said Mr. Lilly.
In corporate news, the BlackBerry maker Research in Motion fell 1.13 percent after a three-day outage that cut off service to users across the world. The company said it fixed the problem, which resulted from a breakdown in its European infrastructure.
The Blackstone Group lost 5.4 percent after a Citi Investment Research analyst dropped the private equity firm from a list of favorite stocks, saying the firm would not be able to make strong real estate investments for some time because of the weak economy.
Netflix rose 3 percent after the company secured a deal with Warner Brothers Television Group and CBS to stream programs from the CW television network.
The Treasury’s 10-year note rose 8/32, to 99 16/32. The yield fell to 2.18 percent, from 2.21 percent late Wednesday.
In Europe, Britain’s FTSE 100 closed down 0.7 percent, while Germany’s DAX and France’s CAC 40 were both 1.3 percent lower.
Oil prices meanwhile tracked European equities lower — benchmark oil was down $1.33 to $84.45 a barrel in electronic trading on the New York Mercantile Exchange.
Article source: http://feeds.nytimes.com/click.phdo?i=359a05ef31ba9c3e7541b50a9aebf627
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