US shares had their worst three-day slide in 10 months last week on fears the White House’s plan to curb bank risk-taking would cut profits.
As well they were driven lower by other factors, such as a drop in tech shares after Google’s disappointing results, plus fears in Europe about Greece’s financial health and then the growing attempt to reject a second term for Fed chairman, Ben Bernanke.
Moves to tighten monetary policy in China were another factor that undermined confidence, especially in Asian markets.
The Dow dropped 216.90 points, or 2.1% Friday, to 10,172.98.
The Standard & Poor’s 500 Index fell 24.72 points, or 2.2%, to 1091.76 and the Nasdaq Composite fell 60.41 points, or 2.7%, to 2205.29.
It was the worst week for the S&P 500 and Nasdaq since October and the worst week for the Dow since March.
The three day fall was the biggest since last March, when the present rebound started.
The S&P 500 and the Dow had hit to 15-month highs on Tuesday.
The Dow and the S&P 500 are now off more than 2% in 2010, while the Nasdaq has shed almost 3%.
But after the fall from Wednesday, the Dow lost 4.1% for the week; the Standard & Poor’s 500 index shed 3.9% and the Nasdaq was off 3.6%.
It was the second weekly fall in a row.
In Australia the market looks like opening down 80 points or more this morning after the Share Price Index fell 87 points in overnight trading Friday night.
That was after the market closed sharply lower Friday on those concerns about increased US banking regulation and worries about inflation and bank lending in China.
At the close, the benchmark ASX200 index was down 76.6 points, or 1.6%, while the All Ordinaries index fell 76.6 points, or 1.6%, to 4771.9.
For the week, the ASX 200 fell 3.2%, the worst weekly performance for three months.
That uncertainty about the Senate’s confirmation of Ben Bernanke for another term as the Federal Reserve’s chairman also rattled sentiment.
Financials and technology shares endured the brunt of the selling in the US, with banks, JPMorgan off 3.4% and Goldman Sachs down 4.2%.
Google slid 5.7% a day after the web search company posted quarterly revenue that missed some very optimistic forecasts from overly bullish analysts.
European shares fell by the most in almost three months, with banks and companies with investments in US financial markets, and some commodity producers leading the way down.
Rio Tinto Plc and Antofagasta Plc, two big commodity groups listed in London, both lost more than 8% as copper slid for a second week.
The Dow Jones Stoxx 600 lost all of its gains for the year last week, falling 2.6%.
National markets fell in all 18 major western European countries.
London’s FTSE 100 shed 2.8%, while Germany’s DAX fell 3.1% and France’s CAC 40 3.4%.
European bank shares tumbled 6.2% to the lowest level since August last year and basic resource shares lost 5.5% across the continent.
Asian shares fell for a fifth day, dragging the MSCI Asia Pacific Index to its biggest weekly drop since June.
Paramount in investors’ minds was fear that China will take more steps to curb price increases in an economy that has led the global recovery.
The MSCI Asia Pacific Index lost 1.3% on Friday and 3.5% over the week, the biggest fall since last June.
Hong Kong’s Hang Seng Index shed 4.3%.
The Shanghai Composite fell 3% and in Tokyo, the Nikkei shed 3.6% over the week.
