February 25, 2009 / 3:01 PM / 11 years ago

US STOCKS-Wall St drops on misgivings about Obama speech

* Obama speech offers little new light

* Bernanke testimony, housing data on tap

* Indexes drop more than 1 percent

* For up-to-the-minute market news, click [STXNEWS/US] (Updates to early morning)

By Ellis Mnyandu

NEW YORK, Feb 25 (Reuters) - U.S. stocks fell on Wednesday due to disappointment U.S. President Barack Obama shed little new light about how his administration would stabilize the economy in a major speech before Congress.

Long-standing worries about recession and the fate of the banking sector persisted, sending shares of financial services companies, big manufacturers and energy companies lower.

Bank of America (BAC.N) shares fell 9.3 percent to $4.29 following news that Merrill Lynch & Co lost $15.84 billion in the fourth quarter, about $533 million more than previously estimated by Bank of America, which bought the Wall Street bank. For details, see [ID:nN24437075].

Shares of Citigroup (C.N) fell more than 14 percent to $2.22 following reports that the bank may sell both its Japanese investment bank and brokerage as the embattled U.S. lender looks to raise cash from a sale of global assets.

“The market is starving for something tangible on which to hang its hat,” said Andre Bakhos, president of Princeton Financial Group in New Brunswick, New Jersey. “There was little of anything tangible in Obama’s speech to bring hope to the market today.”

The Dow Jones industrial average .DJI fell 90.64 points, or 1.23 percent, to 7,260.30. The Standard & Poor's 500 Index .SPX shed 9.41 points, or 1.22 percent, to 763.73. The Nasdaq Composite Index .IXIC lost 16.26 points, or 1.13 percent, to 1,425.57.

Late on Tuesday Obama sought to reassure Americans the country would emerge stronger from the crisis but investors found little in his speech that could help the market sustain its attempted rebound on Tuesday from 12-year lows. [ID:nN24394594].

U.S. regulators are due to begin stress tests on Wednesday to determine how much capital banks need. Even so, investors remain uncertain about how the government would relieve banks of money-losing assets and revive lending.

The economic calendar features a report on January existing home sales, due at 10 a.m. (1500 GMT).

Federal Reserve Chairman Ben Bernanke is back on Capitol Hill at the same time to testify again on the economy, this time to the U.S. House Financial Services Committee. (Editing by James Dalgleish)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below