NEW YORK — Wall Street again surrendered to investors’ anxiety about the financial sector Monday, sending the Dow Jones industrials down 240 points and back into bear-market territory.
The flight from equities sent investors running for the safety of Treasury bonds.
Financials that had rallied in recent weeks after logging huge declines suffered from the same worries about souring debt that caused an abrupt end to their run-up late last week. Wall Street is concerned that a further withering of the housing and credit markets will damage banks’ balance sheets.
An International Monetary Fund report added to some of the stress in the market. The IMF predicted continuing problems in the credit and housing market that will hurt the financial industry. It said, “At the moment a bottom for the housing market is not visible.”
Frederic Dickson, chief market strategist at D.A. Davidson & Co., said investors are still trying to get a longer-term view on the stability of the banking industry, particularly the regional banks.
“Corporate depositors and individual depositors are looking at balances at individual financial institutions,” Dickson said. “I think that’s unsettling some of the banks.”
On Friday, federal officials closed branches of 1st National Bank of Nevada and First Heritage Bank NA, owned by Scottsdale, Ariz.-based First National Bank Holding Co., adding to investors’ jitters about banks.
The Dow Jones industrial average fell 239.61, or 2.11 percent, to 11,131.08.
Broader stock indicators also declined. The Nasdaq composite index also fell into bear-market territory, shedding 46.31, or 2.00 percent, to 2,264.22. The Standard & Poor’s 500 index declined 23.39, or 1.86 percent, to 1,234.37; it has been in bear territory for the past few weeks.
Bond prices jumped as investors again sought the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 4.01 percent from 4.10 percent late Friday.
