MarketWatch: U.S. stock indexes down 2%; financial shares hit

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U.S. stock indexes down 2%; financial shares hit
Sales of existing homes climb in July, but inventories also rise, data show

By Kate Gibson, MarketWatch


NEW YORK (MarketWatch) -- U.S. stock indexes lost 2% on Monday, with the Dow Jones Industrial Average hit with its biggest point decline in more than a month, as concerns about the financial sector weighed on sentiment and housing data failed to appease investors' unease.

"Financial stresses are still permeating global financial systems, despite massive accommodation from the Fed," said analysts at Action Economics.

Stocks head lower at the open, with financials leading the fall. But equities also get some good news as a couple of deals hit the market, including Precision Drilling's purchase of Grey Wolf. Michael Kitchen reports. (Aug. 25)Down for the first in four sessions, the Dow Jones Industrial Averagfell 241.81 points, or 2.1%, to 11,386.25.

All of the Dow's 30 components finished in the red, with the losses led by insurance giant American International Group Inc. , down 5.5% after Credit Suisse analysts lowered their third-quarter profit estimate and target price on the insurance giant.

The S&P 500 Index was off 25.36 points, or 2%, to 1,266.84, with all of the index's 10 industry groups tallying losses -- which by the close was fronted by financials, off 2.7%, then consumer discretionary, down 2.5%, followed by materials, off 2%.

Among the hardest hit, shares of Huntington Bancshares Inc. declined 6.8%, while Lehman Brothers Holdings Inc. fell 6.7%. ......(more)

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