NEW YORK (TheStreet) -- Stocks declined on Tuesday, snapping a four-day winning streak on fresh concerns about the health of banks in the European Union.
Markets traded weak throughout the session but losses accelerated in the final half hour of trading. The Dow Jones Industrial Average shed 107 points, or 1%, to finish at 10,341. The S&P 500 declined 13 points, or 1.1%, to close at 1,091, and the Nasdaq lost 25 points, or 1.1%, to end at 2,208.
American Express (AXP) was the Dow's biggest laggard, shedding 4%, as financials were the greatest drag on the blue-chip index. JPMorgan Chase (JPM) and Bank of America (JPM) each fell more than 2%. Cisco Systems (CSCO) and Walt Disney (DIS) were also prominent losers within the Dow, which saw 26 of its 30 components finish in negative territory.In corporate news, shares of Oracle (ORCL) leapt nearly 6% to $24.26 after the enterprise software company named former Hewlett-Packard (HPQ) CEO Mark Hurd co-president a month after Hurd resigned from HP over a sexual harassment investigation. Oracle was also recently added to Goldman Sachs' (GS) conviction buys list. Meanwhile, Hewlett Packard shed 1% to $39.92 after it filed a lawsuit against Hurd to prevent him from joining Oracle. Global markets slumped on Tuesday on renewed concerns about the European debt crisis and fresh data that showed a slowdown in manufacturing in Germany. Hong Kong's Hang Seng inched 0.2% higher, but Japan's Nikkei slipped 0.8%. The FTSE in London and the DAX in Frankfurt both ended down by 0.6%. A Wall Street Journal analysis of the eurozone stress tests weighed on overall sentiment as it found levels of risky government debt held by EU institutions may have been understated. Global financial stocks also reacted to a new set of capital standards for international banks . According to the German newspaper Die Zeit, which cited from the Basel III proposal, banks will have to maintain a Tier 1 capital ratio of 9% under the new regulations. Banking stocks fell across the board, though regional banks sustained steeper declines weighed by capital concerns. Prominent losers included Marshall & Ilsey (MI), down 5.5%, KeyCorp (KEY), down 3.8% and Capital One Financial (COF) down 4.5%. Investors are looking forward to new stimulus measures that President Obama is likely to announce on Wednesday, including one that would allow companies to hasten write-offs of new plant and equipment investments through 2011. On Labor Day, the President called for $50 billion more in infrastructure spending to boost jobs. Investors were already cheered up by better-than-expected payroll numbers announced last week. "Although the economy continues to face headwinds and the unemployment rate is likely to remain stubbornly high, the August employment report was a step in the right direction for the U.S. economy -- one away from worries of a double dip and calls for additional quantitative easing on the part of the Federal Reserve," said UBS economists Drew Matus and Sam Coffin, adding that the biggest risk to their economic outlook is the possibility of tax increases. "With a modest economic recovery underway and job growth now seemingly beginning to gain traction, tax revenues should begin to gradually recover. A grab for additional revenue on the part of the government would likely prove counterproductive and could damage ongoing economic recovery," Matus and Coffin said in a research note.
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