Wall Street declined overnight as disappointing American corporate earnings including from Bank of America fuelled unease that the recent gains in equities might not be justified by the economic outlook.
Shares of Bank of America fell, last down 5.3 per cent, as the bank reported a lower-than-expected increase in its first-quarter net income.
"Banks are clearly struggling," Jim McDonald, chief investment strategist at Chicago-based Northern Trust Global Investments, told Reuters. "Loan growth has been disappointing, which points to economic growth not being robust."
Yet banks are not alone. Shares of Apple also took a hit, last 6 per cent weaker, amid concern about disappointing iPhone sales after one of its suppliers, Cirrus Logic, said it expected to post a significant inventory reserve charge. Cirrus Logic shares tumbled 15.3 per cent.
In afternoon trading in New York, the Standard & Poor's 500 Index fell 1.46 per cent to 1,551.78, compared with the record high 1,593.37 it closed at on April 11.