Bank stocks and the broader markets sank Monday on more bad news for the sector.
The KBW Bank Index fell 6.42%. The Dow Jones industrial average lost 4.24%, to close at 6,763.29, its first close below 7,000 since October 1997. And the Standard & Poor's 500 index shed 4.66%.
Market watchers said the tone of the trading day was set by news of the government's latest bailout of American International Group Inc. The ailing insurer is to get another $30 billion, for a total of $163 billion. Its shares closed unchanged at 42 cents. Citigroup Inc., another multiple-bailout recipient, settled at $1.20 a share, its lowest close in 24 years.
"The overall concern is that the problems in the financial sector are not going to go away any time soon, and it just adds to the general malaise in the marketplace," said Frank Barkocy, the director of research at Mendon Capital Advisors Corp.
Bank stocks fell across the board. JPMorgan Chase & Co. was off 7.4%, and Bank of America Corp. fell more than 8%, or 32 cents, to $3.76 a share.
Wells Fargo & Co. shed 10.4%, and U.S. Bancorp 8.5%.