On Wall Street, the week began with a drop in prices

Stock prices on Wall Street fell on Monday, with the financial sector experiencing the most significant declines due to investor concerns regarding bank losses in Bernard Madoff’s investment scheme.

The Dow Jones index fell by 0.75 percent, to 8,564 points, while the S&P 500 index plummeted by 1.27 percent, to 868 points. The Nasdaq index lost 2.1 percent, diving to 1,508 points. The financial sector was under the most pressure yesterday as banks issued statements regarding their exposure to a financial ‘pyramid’ valued at approximately $50 billion, designed by former Nasdaq director Bernard Madoff. Last week, U.S. authorities launched an investigation against him due to suspicions of fraud.

The financial sector was also negatively impacted by the downgrade of JPMorgan’s stock rating by Merrill Lynch analysts, who estimate that the bank will incur losses in the fourth quarter. Consequently, JPMorgan’s stock price fell by 7.5 percent, while the S&P financial sector index lost 4 percent. Investors are exercising caution in this sector, especially with the upcoming business results of the two largest U.S. investment banks, Goldman Sachs and Morgan Stanley. Analysts estimate that both banks operated at a loss in the previous quarter.

The technology sector was also under pressure yesterday, particularly Apple shares, which fell by more than 3.5 percent after Goldman Sachs removed the stock from its buy recommendation list due to, as stated, a decline in demand for Apple products. On the other hand, shares of General Motors and Ford rose by more than 3.5 percent following news that the U.S. government will soon approve aid for the automotive sector, thus preventing the collapse of that industry. European markets traded very cautiously on Monday, with initial gains of over 1 percent dissipating by the end of the day. The London FTSE index fell by 0.1 percent, to 4,277 points, and the DAX index of the Frankfurt Stock Exchange also fell by the same amount, finishing at 4,654 points. (H)