* Autos slip as bankruptcy threat looms
* Banks fall on Spain bailout, Geithner
* Dow off 3.4 pct, S&P down 3.3 pct, Nasdaq off 3.1 pct
* For up-to-the-minute market news click []
(Updates to midday, changes byline)
By Leah Schnurr
NEW YORK, March 30 (Reuters) - U.S. stocks slid on Monday
as the Obama administration raised the possibility of takeover
and bankruptcy for two major U.S. automakers, and European
bank rescues sent financial shares lower.
In the latest efforts in its aggressive campaign to shore
up the economy and struggling corporations, the administration
forced out General Motors Corp's <GM.N> CEO, pushed Chrysler
LLC toward a merger and threatened bankruptcy for both. For
more see []. GM shares tumbled 20.4 percent to
$2.88.
Spain, Germany and Britain acted to bolster lenders as the
sector felt the impact of rising bad loans, while Treasury
Secretary Timothy Geithner said over the weekend some banks
still need large amounts of help.
The European efforts "really just hammer home the fact
that this crisis is worldwide and we know Europe's in worse
shape than we are," said Ryan Detrick, senior technical
strategist at Schaeffer's Investment Research, in Cincinnati,
Ohio.
"The fear that they're nationalizing just leads to more
selling of our banks here. It's all really intertwined."
The Dow Jones industrial average <> fell 262.05
points, or 3.37 percent, to 7,514.13. The Standard & Poor's
500 Index <.SPX> lost 26.66 points, or 3.27 percent, to
789.38. The Nasdaq Composite Index <> slid 47.72 points,
or 3.09 percent, to 1,497.48.
Even so, the recent rally has taken the broad S&P 500
index up nearly 17 percent since it hit a 12-year low on March
9, although it is off more than 12 percent for the year so
far.
GM CEO Rick Wagoner, who presided over the company's rapid
decline in the past five years and had run the automaker since
2000, was forced out at the request of the autos panel headed
by former investment banker Steven Rattner. A majority of GM's
board will also be replaced.
In a press conference, U.S. President Barack Obama said
Wagoner's departure reflected that the company needs a new
direction and said the government did not want to run GM.
[].
Investors worried that a potential bankruptcy would have
ripple effects through the entire economy. Shares of auto-part
suppliers fell, including American Axle & Manufacturing
<AXL.N>, which sank almost 20 percent to $1.41.
Spain was forced to rescue its first bank since the
financial crisis began and Germany and Britain also moved to
prop up lenders, sending European markets down.
Geithner said on Sunday that the government will have
about $135 billion left after other banks give back some of
the bailout money, but did not say whether he will ask
Congress for more. []
Citigroup <C.N> tumbled 9.2 percent to $2.38 and Bank of
America <BAC.N> dropped 14.2 percent to $6.30. The KBW Bank
index <.BKX> shed 6.8 percent.
On the merger front, U.S. fertilizer producer CF
Industries Holdings Inc <CF.N> said its board of directors
rejected Canadian fertilizer company Agrium Inc's <AGU.TO>
<AGU.N> revised takeover offer of about $3.8 billion.
[]
CF Industries fell 4 percent to $70.37 while Agrium's
U.S.-listed stock lost almost 8 percent to $35.30. both in
NYSE trading.
(Editing by Jan Paschal)
