NEW YORK — Wall Street wilted Tuesday as investors awaiting next week’s Federal Reserve meeting remained uneasy that fallout from the slumping housing market could bring more bank losses and spark a recession.
Retreating oil prices and signs of strength in industries outside the financial sector could not keep the stock market from declining for a second straight day.
Investors have entered into December, usually a winning month on Wall Street, very cautiously. Most expect lower interest rates when the Fed meets next Tuesday, but the size of the cut, if any, is under debate.
Meanwhile, JPMorgan downgraded major securities firms, warning that while further write-offs of bad mortgage debt might help the firms’ stocks, longer-term concerns about their risk management might hurt their overall valuation. JPMorgan lowered its earnings estimates for some of Wall Street’s biggest players: Goldman Sachs Group Inc., Leh man Brothers Holdings Inc., Merrill Lynch & Co. and Morgan Stanley.
The Dow Jones industrial average fell 65.84, or 0.49 percent, to 13,248.73. Broader stock indicators also dropped. The Standard & Poor’s 500 index fell 9.63, or 0.65 percent, to 1,462.79, and the Nasdaq composite index fell 17.30, or 0.66 percent, to 2,619.83.
