Bank and economic woes hit Wall St; Oracle dives late

Stocks dropped on Wednesday as financial shares slid when concerns resurfaced that bank profits will take much longer than expected to recover from the housing slump. Surging oil prices and data showing a tumble in orders for U.S.-made manufactured goods revived concerns that the economy is already in recession. Bank stocks tumbled across the board when a prominent analyst lowered her first-quarter profit forecasts for Citigroup, Bank of America Corp (BAC.N), JPMorgan Chase & Co (JPM.N), and Wachovia Corp (WB.N). The S&P financial index fell 3.5 percent, marking its biggest setback after rising more than 10 percent in the last two weeks. Oppenheimer & Co analyst Meredith Whitney said bank profits would not start growing any time soon because of fallout from what she called the worst credit cycle in generations. Financials are down "on the combination of Citigroup, Meredith Whitney coming out with talk of more potential write-downs and a lot of profit-taking. Financials moved big the last two weeks," said Matt McCall, president of Penn Financial Group in Denver, Colorado. The other backdrop for the drop in Citigroup's stock was news that the largest U.S. bank by assets has agreed to pay Enron creditors $1.66 billion to settle a lawsuit over its responsibility in the energy trading company's downfall. The Dow Jones industrial average .DJI finished down 109.74 points, or 0.88 percent, at 12,422.86. The Standard & Poor's 500 Index .SPX dropped 11.86 points, or 0.88 percent, to end at 1,341.13 -- marking the broader market's first decline in four days. The Nasdaq Composite Index slumped 16.69 points, or 0.71 percent, to close at 2,324.36. After the bell, there was unnerving news from the technology front as Oracle Corp (ORCL.O), a major software maker, posted quarterly revenue that missed Wall Street's forecasts. Oracle shares slid 8.3 percent to $19.20 after the bell from their Nasdaq close at $20.94.