NEW YORK - Stocks sank Thursday, ending the fastest rally in the S&P 500 since March 2009.
Bank stocks dragged the market lower after J.P. Morgan Chase & Co. reported that a slowdown in investment banking hurt its results in the third quarter. An afternoon surge in tech stocks limited some of the losses.
The Dow Jones industrial average fell 40.72 points, or 0.4 percent, to close at 11,478.13. J.P. Morgan fell 4.8 percent. Other banks also fell. Citigroup Inc. dropped 5.3 percent, Morgan Stanley 4.4 percent and Bank of America Corp. 5.5 percent.
J.P. Morgan is the first big U.S. bank to report earnings. Next week Wells Fargo & Co., Citigroup Inc. and Morgan Stanley will report. J.P. Morgan is widely considered the strongest U.S. bank, so the results don't bode well for other financial companies, said Jason Lilly, a portfolio manager at Rockland Trust Investment Management Group. J.P. Morgan's income fell 4 percent, hurt by a 31 percent plunge in investment banking fees.
Yahoo Inc. rose 1 percent as investors speculated the company might be bought. Tech stocks in the Standard & Poor's 500 index rose 1 percent. The technology-focused Nasdaq composite rose 15.51, or 0.6 percent, to 2,620.24.
"There's a mounting interest in Yahoo, and that has filtered out into tech stocks," said Quincy Krosby, a market strategist for Prudential Financial.
Apple Inc. rose 1.6 percent a day ahead of the release of its latest iPhone. Google's third-quarter earnings, released after the close of trading, soared past analyst expectations. The stock jumped 6.4 percent after-hours.
The Standard & Poor's 500 index fell 3.59, or 0.3 percent, to 1,203.66. Its financial stocks fell 2.4 percent.
