Bank stocks and the broader markets fell Monday as investors worried that a global outbreak of swine flu could slow economic recovery.
The KBW Bank Index fell 4.89%, the Dow Jones industrial average 0.64% and the Standard & Poor's 500 index 1.01%.
Weighing on the market was news that the swine flu virus, which has infected more than 2,000 people in Mexico, killing more than 100 of them, has spread to 73 confirmed cases worldwide — including 40 cases in the United States.
"The current epidemic is only going to marginally add to the current economic slowdown," Eugenio J. Aleman, a senior economist at Wells Fargo & Co., wrote in a note Monday. "Of course, this will depend on how the epidemic pans out and how bad it gets, and this we will probably know during the next several weeks."
In other news, Federal Deposit Insurance Corp. Chairman Sheila Bair, speaking at a luncheon at the Economic Club of New York, said that the concept of " 'too big to fail' should be tossed into the dust bin."
Regulators — preferably the FDIC — should find ways to resolve troubles at the big banks without giving the institutions "a get out of jail free card," Bair said.
Decliners Monday went across the board.
JPMorgan Chase & Co. fell 1.8%, Bank of America Corp. 2%, Wells Fargo & Co. 5.1%, U.S. Bancorp 4.4% and Citigroup Inc., 12 cents, to $3.07 a share.
Among the regional banking companies, SunTrust Banks Inc. was off 8.5%, PNC Financial Services Group Inc. 4.6%, KeyCorp 12%, Comerica Inc. 8.1%, Zions Bancorp. 9.7% and Regions Financial Corp., 65 cents a share, to $4.91.
