Wall Street stocks tumbled on Friday after the surprise resignation of a European Central Bank executive board member brought concerns over the region's debt back to the fore.
Investors also remained skeptical about how much of President Barack Obama's $447 billion proposal to generate U.S. jobs would make it through Congress. Obama on Thursday night challenged Congress to enact tax cuts and new spending to revive a stalled job market, but he faces an uphill fight to win over Republicans.
Finance chiefs from the Group of 7 richest nations are set to meet on Friday, and the group is under heavy pressure to take action to revive flagging economic growth and calm the biggest confidence crisis in financial markets since the global credit crunch.
Stark's resignation is suggesting that there is a lot of pressure being built in the senior levels in the ECB, said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania. There is an increasing realization that this is a major solvency issue in the banking system,
ECB Executive Board Member Juergen Stark will step down from his post, the bank said on Friday, with two sources telling Reuters it was because of a conflict over the central bank's controversial bond-buying program.
The Dow Jones industrial average <.DJI> was down 290.02 points, or 2.57 percent, at 11,005.79. The Standard & Poor's 500 Index <.SPX> was down 29.79 points, or 2.51 percent, at 1,156.11. The Nasdaq Composite Index <.IXIC> was down 51.51 points, or 2.04 percent, at 2,477.63.
Bank of America Corp
Shares of the Dow component fell 1.8 percent to $7.07.
A number of brokerages, including Jefferies, cut price targets on Texas Instruments Inc
On the New York Stock Exchange, decliners were beating advancers by a ratio of nearly 10 to 1, while on the Nasdaq, about four stocks fell for every one that rose by late morning trade.
(Editing by Padraic Cassidy)