U.S. stocks slumped Monday, and banks took the biggest losses. Deutsche Bank plunged as investors worried about the financial health of Germany’s largest bank. Pfizer pulled drugmakers down after it announced it won’t break up into two companies.
Stocks fell for the second day in a row. Banks were hurt by a drop in bond yields, which means lower interest rates and smaller profits on loans. Consumer companies fell as home improvement retailers were affected by a slowdown in sales of new homes.
European banks tumbled after the German magazine Focus said Deutsche Bank won’t get a government bailout if it asks for one. Its report, published Friday, cited “government circles” as its source.
“There’s some stress in the banking industry there, and questions about whether governments have the will to step in,” said Steve Chiavarone, associated portfolio manager for Federated Investors.
The Dow Jones industrial average lost 166.62 points, or 0.9 percent, to 18,094.83. The Standard & Poor’s 500 index fell 18.59 points, or 0.9 percent, to 2,146.10. The Nasdaq composite dropped 48.26 points, or 0.9 percent, to 5,257.49. Stocks are coming off two weeks of solid gains, and the Nasdaq set all-time highs twice last week.
Other banks also tumbled. Goldman Sachs took the largest loss among Dow stocks and sank $3.65, or 2.2 percent, to $161.48. Citigroup shed $1.26, or 2.7 percent, to $45.89.
Bond prices rose. The yield on the 10-year U.S. Treasury note fell to 1.58 percent from 1.62 percent. That also affects banks, as lower bond yields mean lower interest rates and smaller profits on lending.
Stocks overseas also weakened. The DAX in Germany dropped 2.2 percent and France’s CAC 40 fell 1.8 percent. In Britain, the FTSE 100 was down 1.3 percent. Japan’s benchmark Nikkei 225 edged down 1.3 percent. South Korea’s Kospi slipped 0.3 percent and Hong Kong’s Hang Seng lost 1.7 percent.
Oil prices bounced higher as investors monitor a meeting of oil producers in Algeria. Benchmark U.S. crude rose $1.45, or 3.3 percent, to $45.93 a barrel in New York. Brent crude, the international benchmark, rose $1.46, or 3.2 percent, to $47.35 a barrel in London. Oil exploration companies rose the most. Transocean climbed 42 cents, or 4.6 percent, to $9.52 and Noble Energy added 60 cents, or 1.8 percent, to $33.62.
Several companies started the week with deal news. CBOE Holdings, the parent company of the Chicago Board of Exchange, will buy stock exchange operator Bats Global Markets. The companies valued the deal at $3.2 billion, or $32.50 in cash and stock per share of Bats. Bats stock jumped 20 percent Friday as investors hoped that a deal was imminent, and it fell $1.45, or 4.6 percent, to $30.35. CBOE stock lost $3.71, or 5.3 percent, to $66.59.
The dollar slid to 100.34 yen from 101.09 yen. The euro rose to $1.1255 from $1.1231.
Gold edged up $2.40 to $1,344.10 an ounce. Silver dipped 21 cents to $19.60 an ounce. Copper stayed at $2.20 a pound.
In other energy trading, wholesale gasoline gained 3 cents to $1.40 a gallon. Heating oil rose 4 cents, or 3 percent, to $1.45 a gallon. Natural gas added 4 cents to $3 per 1,000 cubic feet.