Goldman Sachs Group Inc. and Morgan Stanley fell the most in more than three months of New York trading amid signs that the European debt crisis has slowed Germany’s economy.
Bank stocks also came under pressure after President Barack Obama won re-election and Democrats who have criticized the financial industry including Elizabeth Warren took Senate seats. Goldman Sachs declined 4 percent to $121.25 at 10:11 a.m. in New York Stock Exchange trading, the biggest drop since May. Morgan Stanley tumbled 5.4 percent to $17.21, its worst showing since July. The firms are based in New York.
European Central Bank President Mario Draghi said today the region’s debt crisis has begun to affect Germany, its biggest economy. Germany’s 2013 growth forecast was cut to 0.8 percent from 1.7 percent amid a slowdown in the 17-nation area, the European Commission said today. Factory orders and industrial production slumped in September and business confidence is at a 2 1/2 year low.
“Germany has so far been largely insulated from some of the difficulties elsewhere in the euro area,” Draghi said today at a conference in Frankfurt. “But the latest data suggest that these developments are now starting to affect the German economy.”
JPMorgan Chase & Co., the biggest U.S. lender, fell 3.7 percent and Bank of America Corp., ranked second, slid 4.6 percent. Citigroup Inc. declined 3.3 percent and Wells Fargo & Co. declined 3.1 percent.
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