NEW YORK — Wall Street fell Monday, led by financial- services stocks, on concerns that the U.S. economy’s expansion will erode amid troubles in the mortgage industry.
The stock market’s decline followed a week in which the Dow Jones industrial average made its biggest weekly point gain in more than four years, rising nearly 391 points, or 3.01 percent. But that advance proved short-lived after a pair of Federal Reserve officials on Monday expressed worry about the subprime-mortgage crisis and its impact on banks and brokerages.
Fed Bank of Boston president Eric Rosengren said in a speech that he was concerned that home foreclosures might worsen as overall economic growth slows. Meanwhile, San Francisco Fed president Janet Yellen labeled growth in the final three months of the year as being “only very meager” and warned that housing problems could “spill over” into consumer spending.
Besides a flagging economy, investors appeared unsure about a government-sponsored rescue of the mortgage industry. Treasury Secretary Henry Paulson said in a speech that the White House is moving closer to an agreement to help thousands of home owners avoid mortgage defaults by temporarily holding their interest rates steady.
The Dow Jones industrial average fell 57.15, or 0.43 percent, to 13,314.57.
Broader stock indicators were also lower. The Standard & Poor’s 500 index dropped 8.72, or 0.59 percent, to 1,472.42, and the Nasdaq composite index fell 23.83, or 0.90 percent, to 2,637.13.
