Posted at 11:56 a.m., Monday, December 3, 2001
Stocks fall on Enron's bankruptcy
• Hawai'i Stocks
• Updated Market Chart
By Robert Dieterich
Bloomberg News Service
NEW YORK — U.S. stocks fell, driving the Standard & Poor's 500 Index to its fourth decline in five days. J.P. Morgan Chase & Co. and Citigroup Inc. led the drop on expectations they face bigger-than-expected losses from Enron Corp.'s record bankruptcy.
"If there's one concern today, it's how these bad loans to Enron are going to spread through the banking system," said Gil Knight, who helps manage $11 billion at Allied Investment Advisers in Baltimore. "It's going to affect the J.P. Morgans."
Dynegy Inc. slid after Enron sued its rival energy trader for $10 billion, saying Dynegy had no right to scuttle its planned acquisition. General Electric Co. took the most off the S&P 500 after its earnings forecast was cut at Salomon Smith Barney.
The S&P 500 shed 6.82, or 0.6 percent, to 1,132.63 with financial stocks accounting for 40 percent of the decline. The Nasdaq Composite Index lost 16.14, or 0.8 percent, to 1,914.44. The Dow Jones Industrial Average fell 90.02, or 0.9 percent, to 9,761.54.
Concern over losses related to Enron and a possible currency devaluation in Argentina helped pull down all 24 stocks in the Philadelphia KBW Banks Index and the 12 stocks in the Amex Securities Broker/Dealer Index.
Some 694 million shares traded on the New York Stock Exchange by 1:20 p.m. New York time, down 7 percent from two weeks ago. Almost three stocks fell for every two that rose on the Big Board.
Exxon Mobil Corp. led oil stocks higher as crude prices soared on concern that shipments from the Middle East might be disrupted by tension between Israel and Palestinians.
Still, investors and traders said optimism that the economy will rebound next year limited today's decline.
