Wall Street sinks on banks' woes

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks slid more than 3 percent on Monday after weak results from Bank of America reignited concerns over the state of the banking industry and the economy.

Wall Street's tumble was broad-based and follows a six-week winning streak, the longest for the S&P 500 since 2007, with the Dow scoring its biggest gain over the period since 1938.

Dow component Bank of America (BAC.N) shares plunged 24.3 percent to $8.02 despite reporting a rise in profits. Bank of America's earnings report raised questions about the sustainability of recent better-than-expected results from banks after the company said its credit quality deteriorated markedly.

"We had started to believe that there was light at the end of the credit crisis tunnel and a lot of the wind got taken out of the sails," said Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York.

The Dow Jones industrial average .DJI dropped 289.60 points, or 3.56 percent, to 7,841.73. The Standard & Poor's 500 Index .SPX tumbled 37.21 points, or 4.28 percent, to 832.39. The Nasdaq Composite Index .IXIC fell 64.86 points, or 3.88 percent, to 1,608.21.

IBM SLIPS AFTER BELL, TEXAS INSTRUMENTS UP

After the closing bell, IBM (IBM.N) reported a bigger-than-expected fall in quarterly sales, showing that even one of the healthier U.S. technology companies was being hurt by a slowdown in spending.

IBM's stock fell 3 percent to $97.47 in extended-hours trading.