US close: Banks pull markets lower after warnings of tougher times

Financial stocks pulled US markets lower at the close on Wednesday with the banking sector taking the biggest hit.

The S&P 500 fell 1.11 points to 2,411.80, while the Dow Jones finished 20.82 points lower at 21,008.65 and the Nasdaq was off 4.67 points at 6,198.52.

Banks were also lower after JP Morgan Chase finance chief Marianne Lake reportedly told investors that trading had declined by roughly 15% in the second quarter. Goldman Sachs also fell, helping to drag the DJIA into negative territory.

On the economic front, the National Association of Realtors' index for pending home sales declined by 1.3% month-on-month in April.

That was considerably worse than economists' expectations for an increase of 1.0% and followed downwards revisions to data for the prior month.

"Prospective buyers are feeling the double whammy this spring of inventory that's down 9.0% from a year ago and price appreciation that's much faster than any rise they've likely seen in their income," said Lawrence Yun, chief economist at NAR.

Manufacturing activity in the Great Lakes area cooled in May, the results of a widely-followed survey revealed, albeit amid indications that firms were expecting conditions to pick-up.

The Chicago Business Barometer showed a rise to 59.4 in May after earlier releasing an incorrect reading of a fall to 55.2.

Crude-oil futures veered heavily lower as markets already underwhelmed by Opec's recent output-curb extension now quit the asset on fears of surging Libyan production. Exxon Mobil and Chevron were both lower on the news.

The precious black liquid has been snared in a chronic supply glut, which saw Opec introduce production pledges last year, which it last week extended out to March 2018.

Nymex-priced West Texas Intermediate crude was down 2% to $48.63 a barrel, while Intercontinental Exchange-traded Brent fell 2.95% to $50.31 a barrel.

"Another slide in crude oil prices, to three week lows, has once again shifted the focus back to the ability of Opec to meaningfully influence the mechanics surrounding reducing inventory levels," said Michael Hewson, chief market analyst at CMC Markets UK.

Dow Jones - Risers

Pfizer Inc. (PFE) $32.65 1.62%
E.I. du Pont de Nemours and Co. (DD) $78.91 1.60%
3M Co. (MMM) $204.30 1.00%
Verizon Communications Inc. (VZ) $46.64 0.95%
Travelers Company Inc. (TRV) $124.82 0.91%
Johnson & Johnson (JNJ) $128.25 0.90%
Procter & Gamble Co. (PG) $88.09 0.79%
McDonald's Corp. (MCD) $151.01 0.64%
International Business Machines Corp. (IBM) $152.57 0.59%
Wal-Mart Stores Inc. (WMT) $78.60 0.58%