Jitters seized the market on Tuesday, with bank stocks down sharply across the board and Citigroup Inc. briefly making a double-digit plunge on what a Financial Industry Regulatory Authority spokesman told Dow Jones Newswires was a reporting error.
Citi briefly was as much as 17% below its opening price after a single trade of 8,800 shares triggered exchange circuit breakers to halt trading of the stock for several minutes. The shares reversed course within moments of resuming trading, though Citi closed at $3.73, down 6.8%.
Investors found plenty of other things to worry about, among them euro-zone debt concerns and declining consumer confidence. The Dow Jones industrial average fell 2.7% and the Standard & Poor's 500 index fell 3.1%. The Nasdaq dropped 3.9%.
Many banking stocks did even worse, with the KBW Bank Index down more than 4.4%.
Rochdale Securities banking analyst Richard Bove said he found the large declines in the sector to be unjustified.
"If you compare this to the fall of 2008, it's a much different banking system today, and one that can easily withstand what the economy is going to throw at it," he said. "But the market's convinced that the second leg of the recession and the second leg of the financial crisis are here."
Worries in the banking sector were focused on large and regional banks. Bank of America Corp. was down 4.4%, Wells Fargo & Co. dropped 4.1% and JPMorgan Chase & Co. fell 3.8%. SunTrust Banks Inc., Zions Bancorp. and Marshall & Ilsley Corp. all joined Citi in losing nearly 7% of their market capitalization over the course of the day.
