Stocks retreated Friday for a third straight day on fresh concerns about President Obama’s proposed restrictions on banks. The market is extending losses that gave the Dow Jones Industrial Average its biggest two-day drop since June 2009. It had lost 336 points, or 3.1 percent, over the past two trading days.
President Obama spooked the stock market on Thursday after asking Congress for limits on how large big banks can be and to put an end to some of the risky trading large financial companies have used in recent quarters to boost their profits. Some in the Obama Administration feel that large Wall Street firms have gone back to highly risky practices that nearly brought down the global financial system, confident that taxpayers will backstop any losses.
Uncertainty over possible ’shackles’ being placed on banks has added to the uncertainty which was already ratcheting higher over concerns about measures China may impose to cool their economy. China officials are concerned about excessive loan growth which may lead to overcapacity in some industries along with sharply rising prices for real estate and other assets. The Chinese government has already instituted some measures to slow loan growth and clamp down on inflation.
The market was also weighed down by some technology shares, notably Google. After the bell, Google reported their earnings results which were disappointing to many Wall Street analysts. In particular, analysts were disappointed by revenue growth for Google. Google’s stock is down over 3 percent.