U.S. stocks retreated for a second day as concern that banks need more capital and the swine-flu outbreak will thwart an economic recovery offset a bigger-than- expected jump in consumer confidence.

Bank of America Corp. and Citigroup Inc. slumped at least 5.9 percent on a Wall Street Journal report that government stress tests may show the lenders need more cash to shore up balance sheets. Delta Air Lines Inc., the largest airline, slid 9.9 percent on concern swine flu will reduce travel. General Motors Corp. tumbled 11 percent as bondholders said a plan to exchange $27 billion in debt for equity is unreasonable.

The Standard & Poor’s 500 Index lost 0.3 percent to 855.16. The Dow Jones Industrial Average slipped 8.05 points, or 0.1 percent, to 8,016.95. The Russell 2000 Index of small companies added 0.7 percent.

Benchmark indexes fluctuated throughout the day as the decline in banks was offset by gains in consumer shares after the Conference Board’s confidence index climbed the most since November 2005.

The S&P 500 has rallied 26 percent since March 9 as companies from American Express Co. to Ford Motor Co. posted better-than-estimated earnings and investors speculated U.S. Treasury Secretary Timothy Geithner’s plan to finance the purchase of as much as $1 trillion in illiquid assets from banks will help to pull the global economy out of a recession.

(Bloomberg.com)