Oil, Banks Drag Dow Down 1.1%

By GEOFFREY ROGOW and DONNA KARDOS YESALAVICH Stocks declined Monday on renewed concerns that some big banks may have issues repaying federal bailout funds and as a slide in oil prices weighed on both energy and materials firms. After rallying about 100 points to start off Monday's session, the Dow Jones Industrial Average ended lower by 104.22 points, or 1.1%, at 9867.96. A slide in oil prices began just before the stock market's turn into the red, with crude futures settling down $1.82 at $78.68 a barrel. Within the Dow, 27 of its 30 components fell, including energy giants Chevronand Exxon Mobil. Currencies As for financials, The Wall Street Journal reported Saturday that Bank of America's attempt to repay federal bailout funds and escape the government's grasp has been snagged by a disagreement over how much additional capital the bank must raise to satisfy regulators, according to people familiar with the situation. Bank of America slid 5.1%, the biggest decliner on the Dow. Along with the banking and oil concerns, traders cited a flood of other factors depressing stocks, including a gain for the dollar and conflicting reports on whether Congress will extend the tax credit for first-time home buyers. More broadly, traders said the market's decline on Monday reflected increasing skepticism about a seven-month rally in stocks that pushed the Dow to its highest point of the year late last week. "The action today is very impulsive and that has added a little more credence to the fear there could be a larger correction in equity markets coming," said Christian Bendixen, director of technical research for Bay Crest Partners. The Standard & Poor's 500 slid 12.65, or 1.2%, to 1066.95, weighed down by its materials and financial sectors, which each declined 2.6%. The tech-heavy Nasdaq Composite Index declined 12.62 points, or 0.6%, to 2141.85. The decline in oil and other commodities prices restarted a round of concern about global demand in the coming months, a fear that percolated last week as two railroad giants posted weak quarterly reports and transportation stocks fell precipitously. Investors had come into the week somewhat on edge with the Dow up nearly 3% for the month, especially given stocks were up even more in September before a slide in the month's final week. Moreover, any strength for the dollar has been a selling sign for stock traders. After some slight morning gains, the dollar was rallying lately against both the euro and the yen. "This gain in the dollar has been building for a couple days," said Adam Boyton, a foreign exchange strategist with Deutsche Bank. As for stocks, Mr. Boyton said "people just aren't going to get long the market into the end of the month right now." Wall Street's overnight losses triggered a sharp pullback in Asian markets Tuesday, with the fall in U.S. stocks and commodity prices weighing on markets across the region. The Nikkei 225 Average ended 1.5% lower at 10212.46 in Tokyo, China's Shanghai Composite fell 2.8% to 3021.46.