Despite a relatively mild start to trading, stocks plunged his afternoon after flirting with small gains, as investors fretted over Europe exposure to U.S. banks. The Dowfell 1.6% according to the unofficial close, while the S&P 500 and the Nasdaqlost 1.7%.
Although financials had been taking a beatingthroughout the session, Fitch Ratings sent the sector into a nosedive after warningthat while it believes U.S. banks have “manageable direct exposures” to distressed European markets at present, further contagion poses a serious risk, and credit-outlooks for American institutions could come under scrutiny if the debt crisis isn’t resolved quickly.
Morgan Stanley (MS) finished the day off down 7.9%, while Bank of America (BAC) settled below $6 after a 3.8% decline.
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