Wall Street struggled to find a direction Monday as investors were torn between hopes for the financial sector and pessimism about the broader economy's slide.
Financial stocks rallied on a news report that Bank of America Corp. could raise capital in the private sector. Shares of major banks have been pummeled to multiyear lows amid growing concern that they don't have enough cash to cover future losses despite multiple government rescues.
Investors were also mindful of remarks from billionaire investor Warren Buffett, who said during an appearance on CNBC that the economy has "fallen off a cliff" over the past six months. He noted that consumers have changed their habits in remarkable ways.
The Dow fell 79.89, or 1.2 percent, to 6,547.05.
The Standard & Poor's 500 index fell 6.85, or 1 percent, to 676.53, while the Nasdaq composite index fell 25.21, or 2 percent, to 1,268.64.
That includes a lack of solid evidence that a recovery might be starting, especially with job losses of more than half a million each month. It's also widely expected that big financial companies will still need bailouts above the hundreds of billions of dollars they've already received.
Consumer and business confidence remain at drastically low levels, and the daily headlines about the economy, the stock market and the financial industry are making matters worse. Although many traders contend the selling is overdone, investors are still hesitant to look for bargains.
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