Wall Street sinks as bank stocks fall

By msnbc.com news services
U.S. stocks sank in afternoon trading Monday, with bank stocks leading the way down. The Dow Jones industrial average finished the trading session with a loss of around 100 points.
Stocks opened higher Monday but soon fell after an hour of trading. Cautious comments from the head of the European Central bank soured any hopes the ECB would find a resolution to Europe's debt crisis anytime soon.
Shares of Morgan Stanley, Citigroup and Bank of America fell.
"If Europe is going to be bring us down it's going to come through the financial firms," said J.J. Kinahan, chief derivatives strategist at TD Ameritrade.
A report in The Wall Street Journal also said U.S. regulators will likely force U.S. banks to follow stricter rules to shore up their finances. The rules are aimed at keeping banks from failing but would pinch profits.
Mario Draghi, the ECB president, said that the central bank was looking for ways to keep the Eurozone's bailout fund effective even if credit rating agencies strip France of its AAA grade. The bailout fund depends on the top ratings of France, Germany and the countries that contribute to it. Draghi also restated his view that large-scale government bond purchases were outside the central bank's responsibility.
A gauge of sentiment among home builders inched up to its highest level since May 2010. The National Association of Home Builders/Wells Fargo builder sentiment index added two points to 21 in December. Any reading below 50 still reflects a negative outlook.
Among companies making large moves Monday:

• Winn-Dixie soared. The supermarket chain is being sold to Bi-Lo LLC, another supermarket operator with stores in the southern U.S., in a deal valued at $560 million.
• Cablevision Systems Corp. rose after an analyst from Citibank said a recent drop in the company's stock seemed "way overdone." The stock has lost 27 percent from the end of October through last Friday following the unexpected resignation of its chief operating officer.
• Commercial Metals Co. fell. The company's board rejected a $1.7 billion takeover bid from investor Carl Icahn, saying the proposed deal undervalued the company.

The three major stock market indexes lost more than 2 percent last week amid worries that some European governments would try to drop the euro. Fitch Ratings warned Friday that it may cut the credit grades for Italy, Spain and four other countries that use the currency.
With two weeks of trading left in 2011, the S&P 500 is 3.5 percent below where it started the year. The Dow has managed to gain 2.2 percent in 2011, led by McDonald's Corp. and its 27 percent gain.