U.S. stocks dropped to an 18-month low on Tuesday , after Federal Reserve Chairman Ben Bernanke urged banks to write down more mortgage debts. Financial shares led indexes to fall while oil and gold dropped from previous records.
The Standard & Poor's 500 Index decreased 21.86, or 1.6 percent, to 1,309.48 at 1:39 p.m. in New York, below its lowest close since September 2006. The Dow Jones Industrial Average lost 199.62, or 1.6 percent, to 12,059.28.
The technology-heavy Nasdaq Composite Index fell 31.1, or 1.4 percent, to 2,227.5. Almost five stocks dropped for every one that rose on the New York Stock Exchange.
The declines came as Bernanke, speaking at a community banking forum in Orlando, Fla., said he expects more home foreclosures as the subprime lending crisis gets worse.
Goldman, the biggest U.S. securities firm by market value, slipped $2.66 to $162.42. Bear Stearns Cos. lost $1.83 to $75.49. Lehman Brothers Holdings Inc. retreated $1.43 to $47.18. Morgan Stanley declined 63 cents to $40.95.
Goldman Sachs Group Inc. said today it cut its first-quarter estimate for Citigroup to a loss of $1 a share from a projection of a 15-cent profit due to a ``miscalculation in our model.''