U.S. stocks continued to slide in the wake of Friday’s rout, with banks among those losing ground following more punitive action by the Federal Reserve against Wells Fargo (WFC).
Wells Fargo dropped 8 percent Monday after the Fed hit the bank with new penalties over a scandal that involved opening millions of phony consumer accounts.
Energy companies were also moving lower as the price of crude oil slipped. Exxon Mobil (XOM) fell 3.5 percent.
After an early 355-point plunge, the Dow Jones Industrial Average recovered but began declining in early afternoon trading by more than 450 points, or 1.8 percent, to 25,051. The Nasdaq composite lost 75 points, or 1 percent, falling to 7,164.
The Standard & Poor’s 500 index fell 37 points, or 1.3 percent, to 2,724, with the energy sector leading losses that included nine of 10 major industry groups.
The market is coming off its worst week in two years. Stocks fell sharply on Friday as traders worried about inflation and rising interest rates.
The slide was fueled by the release of January’s jobs report on Friday that showed wages growing at their healthiest pace in years, with investors now expecting inflation to pick up, leading to higher interest rates and corporate borrowing costs.
“If there is one thing stocks hate is a rising rate environment,” wrote Paul Nolte, a senior vice president and portfolio manager at Kingsview Asset Management. “The markets will be having a rough couple of weeks at it assimilates the ‘new’ normal,” he added of expectations the Fed would not be hiking rates faster than the previously expected three times.
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