U.S. Stocks Extend Decline; Yen Advances to Three-Month High (Michael Patterson)

  The U.S. stock market's worst slide in four years continued for a third day on growing concern that bank earnings growth will diminish as defaults increase.

  March 5 (Bloomberg) -- The U.S. stock market's worst slide in four years continued for a third day on growing concern that bank earnings growth will diminish as defaults increase.

  The weeklong rout in equities worldwide pushed yields on U.S. Treasuries to levels reflecting expectations the Federal Reserve will cut interest rates this year. The yen reached the highest in almost three months against the dollar.

  Countrywide Financial Corp., Merrill Lynch & Co. and Citigroup Inc. led financial shares to their lowest since October, dragging the Standard & Poor's 500 Index and Dow Jones Industrial Average to their eighth decline in nine days.

  ``Is there a big disaster looming in the mortgage market -- that's clearly the concern right now,'' said Dan Veru, who helps manage $2.8 billion at Palisade Capital Management in Fort Lee, New Jersey. ``It's whether it can spread into the prime lenders and are we going into a down credit cycle.''

  The S&P 500 lost 13.05, or 0.9 percent, to 1374.12. All 10 of its industry groups retreated. The Dow average slipped 63.69, or 0.5 percent, to 12,050.41. The Nasdaq Composite Index decreased 27.32, or 1.2 percent, to 2340.68. All three benchmarks closed at their lowest since November.

  The market extended last week's slump, which had pushed the S&P 500 down 4.4 percent, amid a global selloff spurred by concern that share prices have climbed too high during a four- year rally. Today, the Morgan Stanley Capital International Asia-Pacific Index slid 2.8 percent to a two-month low, while Europe's Dow Jones Stoxx 600 Index retreated 1.2 percent.

  New Century Financial Corp., which lends to property buyers with poor credit, tumbled the most ever after JPMorgan said a criminal probe may push it into bankruptcy.

more

READ MORE: Bloomberg