A suicide attack on a Tel Aviv bus that killed at least five and wounded dozens of people sent stocks reeling Thursday.

Stocks had started the day flat as the big banks corrected from the trouncing they took Wednesday, after being downgraded by

Standard and Poor's

. But the blast, at the central intersection of Allenby and Rothschild streets, sent the indices tumbling. Stocks were also pressured by declines on European markets and pessimistic Nasdaq futures. The shekel's weakness against the dollar, which boosted bond yields as high as 11%, also soured the appetite for stocks.

The Maof-25 and TA-100 indices both lost about 1%, while tech stocks proved more resilient with a loss of 0.6%. The Maof ended at 361.2 points and the TA-100 dropped to 351.4 points.

Trade has been relatively brisk in the morning, but slackened as the session wore on to end on thin total turnover of NIS 170 million.

Yesterday stocks were hit hard by a downgrade of Israel's big banks. Standard & Poor's cut

Bank Hapoalim (TASE:

POLI

) and

Bank Leumi (TASE:

LUMI

) to BBB+, from A-minus.

Israel Discount Bank (TASE:

DSCT

) was lowered from BBBpi to Bbpi. But

United Mizrahi Bank (TASE:

MZRH

) was left unchanged at BBBbi.

Other influences on the market Thursday before the blast were the drops on Wall Street Wednesday, and the climbing yields in the long-term bond market.

Bank Hapoalim (TASE:

POLI

) lost its 1% upward correction to finish down a hefty 1.6%, on heavy turnover of almost NIS 21.2 million. On Wednesday Hapoalim, Israel's biggest bank, plummeted by 5.1%.

Its arch-rival,

Bank Leumi Le-Israel(TASE:

LUMI

), also lost its morning surge and ended off by 1.7% on a volume of NIS 15.5 million.

United Mizrahi Bank (TASE:

MZRH

) reversed to fall 1.4%, after sinking 3% yesterday despite being saved from a downgrade.

Trade in

Teva Pharmaceuticals

(Nasdaq:

TEVA

) was as brisk as usual, with the drugmaker losing 0.1% on turnover of almost NIS 47.8 million.

The IDB group stocks were in the doghouse today.

IDB Holding Corporation (TASE:

IDBH

) finished down 3.9%, and its subsidiary

IDB Development Corporation (TASE:

IDBD

) fell 2.2%, albeit both on a moderately low volume of shares.

Clal Industries and Investments (TASE:

CII

) tumbled by 3.6% and

Discount Investment Corporation (TASE:

DISI

) fell by a relatively middling 1.7% on heavy turnover of almost NIS 10 million.

Nice Systems (Nasdaq:NICE) started the day with a 2.6% arbitrage spread with Nasdaq, and finished the day down 2.8%.