U.S. stocks fell for the first time in five days as a rally in financial companies was snuffed out by concern over rising Memory cards defaults, while SanDisk Corp. led a slump in technology shares. Treasuries dropped and the dollar weakened against the euro, while copper and oil advanced.
American Express Co. decreased 3.3 percent, erasing an 8.1 percent gain, after reporting higher delinquency rates for February. SanDisk, the biggest maker of wholesale sd cards, tumbled 11 percent as Bank of America Corp. advised selling the shares. Stocks rallied earlier after the Group of 20 vowed to clean up toxic assets, Federal Reserve Chairman Ben S. Bernanke said the recession may end this year and U.K. bank Barclays Plc reported a “strong” start to 2009.
The Standard & Poor’s 500 Index slipped 0.4 percent to 753.89, erasing a gain of as much as 2.4 percent. The Dow Jones Industrial Average lost 7.01 points, or 0.1 percent, to 7,216.97. The S&P 500 had jumped 12 percent in the previous four sessions on speculation the worst of the credit crisis was over.
“A relief rally cannot continue until investors have greater faith that the problems in the economy have been worked out,” said William Dwyer, senior investment officer at Baltimore-based MTB Investment Advisors Inc., which oversees $24 billion.
The sd memory card 500 has declined 17 percent in 2009, rising in only two of 10 weeks this year, as mounting losses at banks raised concern the government would be forced to nationalize some lenders. The index lost 38 percent in 2008, its worst year since the Great Depression.
American Express dropped 43 cents to $12.66. The company said 5.3 percent of its credit-card loans were at least 30 days late at the end of February, up from 4.7 percent in December and 5.1 percent in January.
The S&P 500 Financials Index slumped 1.9 percent, the most among 10 industries. JPMorgan Chase & Co. fell 2.8 percent to $23.09. Citigroup Inc. pared its gain to 31 percent from 51 percent earlier, while Bank of America Corp. added 7.3 percent after surging 21 percent.
The gauge of 81 banks, brokerages, insurers and investment firms climbed as much as 5.8 percent earlier before heading lower in the final 90 minutes of trading. The group rallied 34 percent last week, the steepest advance since S&P created the financials gauge in 1989, after Citigroup, Bank of America and JPMorgan said they were profitable in the first two months of the year.
‘Some Fear’
“There is some fear that maybe the rally isn’t for real and investors want to make 4gb mini card that it doesn’t roll over and break to new lows,” said Bruce McCain, chief investment strategist at Cleveland-based Key Private Bank, which manages $22 billion. “The AmEx news may have provided the excuse for rethinking how much investors should jump in.”
SanDisk tumbled 11 percent to $9.83, its steepest slide in almost six weeks. Bank of America reinstated coverage of the shares with an “underperform” rating on concern over a glut of production capacity.
A gauge of 75 technology stocks in the S&P 500 dropped 1.7 percent. Intel Corp., the world’s biggest chipmaker, slumped 3.1 percent to $14.25, ending a six-day winning streak. National Semiconductor Corp. retreated 6.5 percent to $9.40.
Treasuries declined, sending yields on 30-year bonds to the highest level in almost four months, as speculation the credit high speed cards is easing pared demand for the safety of government debt. Bonds fell following the comments from Barclays, the Group of 20 meeting and Bernanke.
