NEW YORK — Wall Street skidded lower Tuesday as downbeat news from JPMorgan Chase and other financial companies lifted the market’s anxiety about the continuing impact of the credit crisis on the economy. The Dow Jones industrials fell nearly 140 points.
The latest reminder of continuing troubles for banks and brokerages came when JPMorgan said late Monday that it has incurred wider losses in its mortgage holdings so far in the third quarter than it did in the second quarter. The nation’s second-largest bank by assets said in a regulatory filing that it lost $1.5 billion, after hedges, in its mortgage-backed securities and loans this quarter, compared with $1.1 billion in the second three months of 2008.
The losses were proof to investors that the financial sector’s problems appear to be nowhere near a resolution.
Meanwhile, Goldman Sachs fell after several analysts lowered their ratings and earnings estimates for the investment bank. And UBS, Switzerland’s largest bank, reported further losses and write-downs of $5.1 billion during the second quarter.
The market’s losses were mitigated for part of the session by a drop in the price of oil — an illustration of the ongoing push-and-pull on Wall Street between oil prices and any news about financials. The erratic trading has led to a series of triple-digit moves up and down in the Dow in the past few weeks, including Tuesday’s drop.
Oil trading was buffeted Tuesday by several factors: differing views on whether global demand is falling or rising, and word from BP PLC that it had shut down an oil pipeline that runs through Georgia as a precautionary measure because of the fighting between Georgian and Russian troops. Light, sweet crude settled down $1.44 at $113.01 a barrel on the New York Mercantile Exchange.
The price of crude has fallen more than $30 from its July 11 high of $147.27, easing concerns on Wall Street about inflation. But Tuesday the anxiety over the financial sector overwhelmed any relief about oil prices.
“Some of the big bellwether financial-services companies are precipitating the correction that we’re seeing,” Phil Orlando, chief equity market strategist at Federated Investors, said of Tuesday’s retreat by stocks.
The Dow fell 139.88, or 1.19 percent, to 11,642.47.
Broader stock indicators also declined. The Standard & Poor’s 500 index fell 15.73, or 1.21 percent, to 1,289.59, and the Nasdaq composite index fell 9.34, or 0.38 percent, to 2,430.61.
