Dow slides on bank woes in Eurozone

US stocks slid yesterday, driving the Dow to its lowest level since 10 February as fresh signs of Europe’s banking problems emerged.

The Eurozone’s turbulence kept investors wary of taking on risk, after the S&P 500’s 4.2 per cent drop last week.

Financial shares were among the day’s largest decliners, with the KBW Bank index falling 3.3 per cent. Wells Fargo fell 4.7 per cent to $28.71 after Goldman Sachs cut its rating on the stock to “neutral” from “buy.”

Concerns about Europe’s banking system continued to weigh on markets, after the Bank of Spain took over a small savings bank, CajaSur, over the weekend, increasing anxiety among investors worried about debt problems spreading throughout financial markets.

“What happens specifically to Greece doesn’t matter a whole lot, but if you start spreading to larger countries like Spain, then it becomes an issue. That is what is causing all this right now,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Illinois.

The Dow Jones industrial average dropped 126.82 points, or 1.24 per cent, to 10,066.57.

The Standard & Poor’s 500 Index slipped 14.04 points, or 1.29 per cent, to 1,073.65.

The Nasdaq Composite Index fell 15.49 points, or 0.69 per cent, to 2,213.55.

Despite the accelerated selling late in the day, some pockets of strength remained in the market. That was especially true in the tech sector.

Apple advanced 1.8 per cent to $246.76 after Morgan Stanley raised its price target on the stock by $35 to $310 and added the company to its “Best Ideas” list.

Google gained 1.1 per cent to $477.16 after Citigroup added the No. 1 Internet search engine to its top picks live list, saying the recent correction in its stock price created the most compelling risk-reward opportunity in the large-cap Internet sector.