Wall Street fell for a second straight day today as investors grew more worried that the financial sector is still suffering badly from...
NEW YORK — Wall Street fell for a second straight day today as investors grew more worried that the financial sector is still suffering badly from the credit crisis.
The Dow Jones industrial average fell 100.97 to 12,402.85, after being down more than 160 points earlier in the session. That gives the Dow a two-day loss of 235 points.
Boeing, one of the 30 Dow stocks, tumbled $3.03 to close at $78.12 a share. Microsoft, also a Dow stock, fell 49 cents to $27.31.
Broader market indexes were also lower. The Standard & Poor’s 500 index dropped 8.02 to 1,377.65, while the Nasdaq composite index fell 11.05 to 2,480.48.
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The market was treading water for much of the session, then tumbled in early afternoon as concerns about financial companies intensified. The Wall Street Journal reported today that Lehman Brothers was planning to raise cash, and in the afternoon, analysts said rumors were swirling on trading desks about the investment bank trying to borrow from the Federal Reserve.
“There’s some nervousness that they may be borrowing from the (Fed) discount window … and that they’re overlevered,” said Jim Herrick, manager of equity trading at Baird & Co., saying that the rumors were reminding investors of Bear Stearns’ collapse in March.
Lehman Treasurer Paolo Tonucci denied the rumor. “We did not access the primary broker-dealer facility,” he said in a statement, adding that the investment bank has sufficient liquidity.
Herrick said such fluctuations were not unusual, given the anxiety on the Street. “This market’s very jittery and nervous, and a lot of times you’ll see wild moves, wild gyrations, when it’s driven by rumors and innuendo.”
The Lehman rumors followed a spate of bad news about other financial companies on Monday.
“There’s this long, slow grind in the financials, and the market’s still trying to find the silver bullet to address all of these concerns at the big banks and money centers,” said Craig Peckham, market strategist at Jefferies & Co.
Lehman dropped as much as 14.5 percent today, hitting lows not seen since March 17, when the deal that led to JPMorgan Chase & Co. buying Bear Stearns was announced, while its rivals fell 3 percent to 4 percent. The sector recovered much of the drop as the session wore on, although Lehman shares closed down $3.18, or 9.4 percent, at $30.65.
Separately, weak May auto sales figures reflected continued concerns about consumer spending, while government data showed a surge in factory orders and a jump in capital spending by U.S. businesses.