Stocks open lower, extend losses to second day
NEW YORK -- Wall Street extended its losses into a second day today as worries about banks' balance sheets and poor first-quarter earnings reports intensified.
The Dow Jones industrial average dropped nearly 150 points while the broader indexes fell more than 1.5 percent.
Word that the International Monetary Fund was set to forecast $4 trillion in bad assets on banks' books added to concerns about the financial industry. Published by London-based paper The Times, the report underscored investors' fears that the U.S. government's recent efforts to purge banks of troublesome loans might not work.
Meanwhile, investors are bracing for the coming flood of first-quarter earnings reports. Aluminum giant Alcoa Inc. will kick off earnings season Tuesday after the close of the market.
Investors have been more optimistic in recent weeks, sending the major indexes up more than 20 percent from 12-year lows in early March on increasingly positive news about the economy. But many analysts have warned that the rally might not be sustainable, especially as first-quarter earnings loom.
"I don't think anybody is making a bet on improvement yet," said Jon Biele, head of capital markets at Cowen & Co. "There is still a very much wait-and-see attitude that is weighing heavily on the market."
The reports, which will likely give investors some sense of where the economy is headed over the next several months, could easily upset the market if they are worse than expected, analysts say.
In the first half hour of trading, the Dow Jones industrial average dropped 152.04, or 1.9 percent, to 7,823.81. The Standard & Poor's 500 index fell 17.79, or 2.1 percent, to 817.69, while the Nasdaq composite index fell 28.70, or 1.8 percent, to 1,578.01.
