U.S. stocks tumbled after analyst downgrades of Citigroup Inc. shares spurred speculation the nation’s largest bank may have to shore up its capital, sending financial companies to their biggest drop in five years.
Citigroup slid the most since 2002 after CIBC World Markets said its dividend may be cut and Credit Suisse Group reduced its rating. Bank of America Corp. had its steepest decline in four years. Retailers fell, led by Target Corp., after consumer spending slowed more than economists forecast.
The Standard & Poor’s 500 Index lost 40.94, or 2.6 percent, to 1,508.44, erasing about $369 billion of market value from the benchmark for American equities. Financial shares, this year’s worst-performing industry, led the slide with a 4.6 percent retreat, the most since September 2002. The Dow Jones Industrial Average decreased 362.14, or 2.6 percent, to 13,567.87. The Nasdaq Composite Index slipped 64.29, or 2.3 percent, to 2,794.83. More than 13 stocks fell for every one that rose. [MORE]