25 Jul 2008

Wall Street tumbles, led by financials

5:24 pm on 25 July 2008

US stocks tumbled more than 2% on Thursday after a report showing yet another drop in US home sales prompted investors to take profits in financial shares.

The Dow fell the most in a month, as the rising price of oil compounded worries about the economy.

Financial companies, which have been incurring huge losses from the housing slump, slid after data from the National Association of Realtors showed June sales of existing homes hit a 10-year low.

An index of bank stocks fell 6.7%, after rising about 40% over the past week.

The Dow Jones industrial average fell 283.10 points, or 2.43%, to close at 11,349.28. The Standard & Poor's 500 Index slid 29.65 points, or 2.31%, to 1,252.54, while the Nasdaq Composite Index shed 45.77 points, or 1.97%, to 2,280.11.

Shares of companies particularly vulnerable to higher fuel costs fell, as the price of crude oil rose. US light crude settled at $US125.49 a barrel, up $US1.05.