Stocks fell on Thursday as shares of financial services companies slid on concerns about the lingering effects of the credit crunch following Bank of America Corp's disappointing quarterly results.
The No. 2 U.S. bank said profit plummeted 32 percent, dragging down shares of other big banks and renewing worries about the financial sector's outlook.
A report suggesting weakness in the labor market added to the market's jitters, along with a slide in the dollar and near-record crude oil prices. Investors will look at September leading economic indicators, due for release at 10 a.m. EDT, for further clues on the economy's direction.
As we continue to see what's coming out of these banks, it's going to be very hard for them to turn around such a difficult quarter, said Peter Dunay, investment strategist at Leeb Capital Management in New York. The pressure is going to continue to be on the market.
The Dow Jones industrial average was down 29.35 points, or 0.21 percent, at 13,863.19. The Standard & Poor's 500 Index was down 5.28 points, or 0.34 percent, at 1,535.96. The Nasdaq Composite Index was down 10.79 points, or 0.39 percent, at 2,781.88.
Bank of America shares dropped 3.7 percent, while shares of Citigroup Inc, the No. 1 U.S. bank, slid 1.6 percent to $43.94.
Before the open, a government report showed that a jump in the number of U.S. workers filing new claims for jobless aid was the biggest for any week since February.