- The Washington Times - Saturday, May 16, 2009

Financial stocks led the market lower Friday after Federal Deposit Insurance Corp. Chairman Sheila C. Bair said some chief executives will be replaced within months after the government examines the banks tested for financial strength.

“Management needs to be evaluated,” Ms. Bair said in an interview for Bloomberg Television’s “Political Capital With Al Hunt,” to be broadcast this weekend. “Have they been doing a good job? Are there people who can do a better job?”

Zions Bancorp, Bank of America Corp. and Fifth Third Bancorp led declines in 23 of 24 companies in the KBW Bank Index. Zions shares fell $1.07, or nearly 7 percent, to $15.05. Bank of America fell 64 cents, or nearly 6 percent, to $10.67. Shares of Fifth Third fell 42 cents, or nearly 6 percent, to $7.10.

The Dow Jones Industrial Average fell 62.68, or 0.8 percent, to 8,268.64. The Standard & Poor’s 500 Index fell 10.19, or 1.1 percent, to 882.88, and the Nasdaq Composite Index fell 9.07, or 0.5 percent, to 1,680.14. The Russell 2000 Index of small companies declined 1 percent.

The S&P 500 is up about 30 percent in the past two months, which may be prompting profit-taking.

“This market is tired,” Joe Saluzzi, co-head of equity trading at Themis Trading, told the Associated Press.

raders are focusing on what comes next.

“We’ve gotten through the panic point, and what will get us to the next level is seeing the economy actually grow. It’ll happen, but it’s a matter of when,” Douglas Kreps, managing director at Fort Pitt Capital Group, told AP.

The markets have struggled this week to extend the rally, after disappointing retail sales reports. Chrysler and General Motors’ plans to slash their dealer networks also worried investors. GM fell 6 cents, or 5.2 percent, to $1.09 on Friday.

Energy shares also hurt the market as oil slid $2.28 to settle at $56.34 a barrel on the New York Mercantile Exchange. Schlumberger fell $1.88, or 3.5 percent, to $52.05, while Devon Energy fell $3.51, or 5.7 percent, to $58.50.

The Dow dropped 3.6 percent on the week; the S&P 500 Index lost 5 percent; and the Nasdaq slid 3.4 percent. The Russell 2000 fell 7 percent.

The blue-chip average lost 155 points Monday and 184 points Wednesday.

Among economic developments moving the markets Friday:

Eurostat, the European Union statistical agency, said the economy of European countries shrank 2.5 percent in the first quarter.

The Reuters-University of Michigan index showed consumer sentiment rose from 65.1 in April to 67.9 in May, an eight-month high. Economists in a Reuters survey expected a preliminary May reading of 67.

The Treasury Department agreed to extend billions in federal bailout funds to six major life insurers, but some interpreted the move as a sign that the insurers’ problems threaten the financial system.

Hartford Financial said it is eligible for $3.4 billion from the Troubled Asset Relief Program, or TARP, while Lincoln National Corp. said it has been initially approved for a $2.5 billion injection.

Hartford fell 15 cents to $14.60, while Lincoln National fell 12 cents to $16.12.

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