U.S. stocks plunged on Tuesday as investors worried that the U.S. government's effort to help banks might not work and first-quarter earnings reports might be worse.
A report published by London-based paper The Times touched off investors' fears, warning that the International Monetary Fund was set to forecast US$4 trillion in toxic assets on banks' balance sheets.
Investors are focused on bank earnings that will come out after the Good Friday holiday. Market expectations have been rather pessimistic about potential loan losses. Major banks including Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. will release their first season earnings next week.
Confidence among U.S. chief executive officers retreated in the first quarter to the lowest level in at least seven years, according to Washington-based Business Roundtable's economic outlook.
Meanwhile, aluminum producer Alcoa Inc. will kick off earnings season after the closing bell. Investors are bracing for the coming flood of first-quarter earnings reports, as the market predicted that CEOs will lower expectations for the rest of the year.
The Dow Jones fell 186.29, or 2.34 percent, to 7789.56. Broader indexes also moved lower. The Standard & Poor's 500 index lost 19.93, or 2.39 percent, to 815.55; and the Nasdaq plunged 45.10, or 2.81 percent, to 1,561.61.
(Xinhua News Agency April 8, 2009)
