Wall Street Slides on Data, Nasdaq Negative for Year

Wall Street Slides on Data, Nasdaq Negative for Year

(Reuters) – Wall Street resumed its slide on Friday, with the Nasdaq turning negative for the year, after China’s weaker trade data and disputes about a second Greece bailout weighed on already fragile sentiment.

Bank stocks ranked among the top decliners. The Federal Reserve said it plans to expand the number of banks it will subject to annual tests used to determine if stock dividends can be increased and whether an institution is holding enough capital.

“It’s an incremental negative that makes it easier to be negative and sell any financial stocks right now,” said Michael James, senior trader at Wedbush Morgan in Los Angeles. “The financial stocks have been a big weight and an underperformer all year so the path of least resistance in the financials continues to be lower.”

The KBW regional banks index .KRX fell 1.5 percent and the S&P financial sector index .GSPF dropped 1.6 percent.

The Nasdaq Composite erased its gains for the year, while the Dow and the S&P 500 were on track for a sixth straight week of losses. A string of sub-par U.S. economic data in the past few weeks has turned investors away from equities.

China’s sales to the United States and the European Union slumped to their weakest since late 2009, excluding Lunar New Year holidays, underlining the view that the world economy is stumbling.

“Recent economic reports have been very weak and people are worried about the idea of a double-dip recession,” said Janna Sampson, co-chief investment officer of OakBrook Investments LLC in Lisle, Illinois.

“I am still expecting to see second-half growth, and the market pick back up as we see that,” Sampson said. “But are we going to see it before we get earnings reports for the second quarter? I doubt it. June is probably going to be pretty weak.”

In another negative for U.S. stocks, the euro fell as concerns about the Greek debt crisis eclipsed any support from a likely euro-zone interest-rate increase next month. Investors have been trading the correlation between stocks and the dollar recently.

The Dow Jones industrial average .DJI lost 143.23 points, or 1.18 percent, to 11,981.13. The Standard & Poor’s 500 Index .SPX fell 15.96 points, or 1.24 percent, to 1,273.04. The Nasdaq Composite Index .IXIC dropped 35.38 points, or 1.32 percent, to 2,649.49.

The PHLX semiconductor index .SOX tumbled 2 percent, sinking to its lowest since December 1. The SOX fell below its 200-day moving average for the first time since last October.

Ally Financial (GKM.N), an auto and mortgage lender majority owned by the U.S. government, delayed a $6 billion initial public offering, further troubling investors worried about the poor performance of financial stocks during the market’s recent decline.

(Reporting by Rodrigo Campos; Additional reporting by Edward Krudy; Editing by Jan Paschal)

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Ex law school student. I was kicked out for revealing I had a heart actually beating inside. I used to be in a modern dance company. I'm working on my 7 miracles to be proclaimed a saint by the pope. #1 is really hard, but once i get over that hump the other 6 will be a cinch.

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