NEW YORK — Wall Street retreated Monday on more signs of economic weakness and executive shake-ups at two major banks — reminders of the ongoing fallout from the credit crisis. The Dow Jones industrial average fell more than 130 points.
Two key economic reports indicated that the economy is still struggling. As expected, the Institute for Supply Management’s manufacturing index for May showed its fourth straight monthly decline, while the Commerce Department said construction spending dipped in April for the sixth time in seven months because of a drop in homebuilding.
The market drew no comfort from the ailing financial sector, either. As the financial system still contends with the aftermath of the nation’s prolonged credit problems, Wachovia chief executive Ken Thompson was forced out Monday, and Washington Mutual is taking the chairman role away from chief executive Kerry Killinger.
Thompson became the third CEO of a major U.S. financial institution to lose the top job as a result of the credit crisis.
In addition, British lender Bradford & Bingley issued a poor financial outlook and said it is selling a 23 percent stake to a private-equity firm, while ratings agency Standard & Poor’s Corp. downgraded Merrill Lynch & Co., Morgan Stanley and Lehman Brothers Holdings Inc. and revised Banc of America Corp. and JPMorgan Chase & Co.’s outlooks to negative.
After slipping last week, light, sweet crude for July delivery rose 41 cents to settle at $127.76 a barrel on the New York Mercantile Exchange.
The Dow Jones industrial average fell 134.50, or 1.06 percent, to 12,503.82, after gaining last week on better-than-expected economic data and a pullback in oil prices. The blue-chip index had shed more than 200 points in the session.
Broader stock indicators also dropped Monday. The S&P 500 index fell 14.71, or 1.05 percent, to 1,385.67.
The Nasdaq composite index fell 31.13, or 1.23 percent, to 2,491.53.
