Stocks fell on Monday on concerns about the European economy and expectations that the Federal Reserve will jump on board a global move to require large banks to hold more capital.
The Dow Jones industrial average closed at 11,766.26, down 100.13 points or 0.8 per cent. The broader S&P 500 closed at 1205.35, down 14.31 points or 1.2 per cent. In Canada, the S&P/TSX composite index closed at 11,539.70, down 95.68 points or 0.8 per cent.
U.S. financials were among the hardest hit, with Bank of America Corp. falling 4.1 per cent and touching its lowest level since the financial crisis. JPMorgan Chase & Co. fell 3.7 per cent and Citigroup Inc. fell 4.7 per cent.
The moves come amid a report in the Wall Street Journal that the Fed will support tougher capital requirements for large financial firms. The news out of Europe wasn’t uplifting either: Mario Draghi, president of the European Central Bank, made some bearish comments about the European economy, saying that the outlook was uncertain, and added that the pressure on government bonds was unprecedented.
Still, the downward moves follow a bout of recent volatility – where stocks have shown signs of strength in early trading only to weaken as the day progresses.
Besides financials, economically sensitive stocks were the worst hit. Alcoa Inc. fell 3.2 per cent and Microsoft Corp. fell 1.8 per cent.
Among Canadian stocks, Suncor Energy Inc. fell 1 per cent and Canadian Oil Sands Ltd. fell 2 per cent after the price of crude oil retreated to $93.53 (U.S.) a barrel, down 34 cents. Barrick Gold Corp. fell 0.8 per cent, with the price of gold trading at $1,596.70 an ounce, down $1.20. As well, Eldorado Gold Corp. fell 12.5 per cent after it struck a $2.5-billion (Canadian) deal to acquire European Goldfields Ltd.
Canadian banks were mixed: Royal Bank of Canada fell 0.3 per cent and Bank of Nova Scotia fell 0.5 per cent, but Toronto-Dominion Bank rose 1 per cent.