Stocks decline on new proposal to regulate banks
Major US stock indices dropped more than 1.5 per cent on Wednesday after a government regulator said it was considering new disclosure requirements for financial institutions, while the price of oil reached another record high.
Securities and Exchange Commission (SEC) Chairman Christopher Cox said the agency will require investment banks to report capital and liquidity levels as part of an overhaul of its oversight practices, prompting hefty declines in financial shares.
Government agencies have been criticized for failing to supervise banks and lenders that have reported billions of dollars in writedowns of mortgage-related assets since August.
Crude oil for June delivery topped 123 dollars per barrel on the New York Mercantile Exchange, sending transport and retail company stocks lower.
The blue-chip Dow Jones Industrial Average dropped 206.48 points or 1.59 per cent to 12,814.35. The broader Standard & Poor 500 Index was down 25.69 points or 1.81 per cent to 1,392.57. The technology- heavy Nasdaq Composite Index declined 44.82 points or 1.80 per cent, to 2,438.49.
The dollar rose to 64.95 euro cents from 64.39 euro cents on Tuesday, but inched lower to 104.73 Japanese yen from 104.77 yen.
Gold fell 6.50 dollars to 871.20 dollars per fine ounce.