US stocks fall, capping worst week in three months

Business Materials 21 February 2009 03:48 (UTC +04:00)

Major US stock indices plunged Friday, led by financial shares and sending the Dow Jones Industrial Average to its worst week in three months, dpa reported.

The blue-chip Dow closed at a six-year low and at one point in the day had passed its lowest level during the dotcom crisis of 2002. The index tumbled 6.2 per cent for the week.

Much of the week's sell-off has come amid investors' concerns that a new wave of bank nationalizations could soon strike Wall Street. Senate Banking Committee Chairman Chistopher Dodd told Bloomberg News that it was "possible that (nationalization) may happen" to some banks.

Financial shares slumped 1.5 per cent on the day. Citigroup Inc's stock price plunged 22 per cent.

The White House and Bank of America Corp - one of the key candidates for nationalization - spurred a minor afternoon rally as they sought to allay the investors' fears.

Bank of America Chief Executive Kenneth Lewis in a memo to employees said he was confident the bank could survive the country's deepening recession "on our own," according to Bloomberg.

White House spokesman Robert Gibbs said Obama still believes "a privately held banking system ... is the correct way to go."

The Dow industrials fell 100.28 points, or 1.34 per cent, to 7,365.67. The broader Standard & Poor's 500 Index lost 8.89 points, or 1.14 per cent, to 770.05. The technology-heavy Nasdaq Composite Index dropped 1.59 points, or 0.11 per cent, to 1,441.23.

The US currency slipped against the euro to 77.94 euro cents from 78.91 euro cents on Thursday. The dollar dropped against the Japanese currency to 93.28 yen from 94.18 yen.