NEW YORK, Oct. 21, 2009 (Xinhua News Agency) -- U.S. stocks tumbled on Wednesday after the news of Wells Fargo being downgraded outweighed upbeat banks earnings and positive signs of recovery in a Fed survey. Dow closed below 10,000 point level.
Shares have been higher most of the session until late afternoon trading when news broke that banking analyst Dick Bove downgraded Wells Fargo & Co. (NYSE:WFC) to a "sell." Financial sector led the big board sharply lower.
Earlier the day, largest U.S. home lender this year posted record third-quarter profit by limiting defaults and wringing savings out of Wachovia Corp. Morgan Stanley (NYSE:MS) , the sixth-largest U. S. bank (NYSE:USB) by assets, reported its first profit in a year, surpassing analysts' estimates on higher investment-banking fees.
The Federal Reserve said in its latest beige book, a survey tracking regional economic activities in the United States, that it found the economy is making 'modest' gains with housing and manufacturing leading the recovery. However, the survey also showed that consumer spending remains weak.
Yahoo! Inc., the owner of a major search engine, rose strongly as profit beat estimates and uplifted tech shares.
Energy and basic material shares got a lift as oil prices hit a new one-year high. Crude futures settled above 81 U.S. dollars on Wednesday on a larger-than-expected drop in gasoline inventory and a weakening dollar.
The Dow Jones fell 92.12, or 0.92 percent, to 9949.36. Broader indexes also turned negative. The Standard & Poor's 500 index dropped 9.66, or 0.89 percent, to 1,081.40 and the Nasdaq lost 12. 74, or 0.59 percent, to 2,150.73.
