* Treasury's bank plan lacks detail sought by investors
* Bernanke says liquidity expansion no panacea
* All 30 Dow components fall
* Dow off 4.6 pct; S&P 500 off 4.9 pct; Nasdaq off 4.2 pct
(Updates final closing figure on Dow)
By Chuck Mikolajczak
NEW YORK, Feb 10 (Reuters) - U.S. stocks tumbled more than
4 percent on Tuesday as investors pummeled bank shares on
concerns a reworked plan to shore up the financial sector may
not be enough to thaw credit markets and alleviate the
deepening recession.
The Dow industrials posted their biggest one-day loss since
Dec. 1. Losses accelerated after the Treasury Department rolled
out an intensely awaited financial rescue plan, saying it would
spend up to $2 trillion to mop up bad bank assets and revive
consumer lending.
But investors were sharply disappointed by the lack of
detail on how the government will cleanse toxic assets
burdening the financial system, triggering a nearly 14 percent
slide in the KBW Bank Index <.BKX>.
"This is not a clear-cut plan. It is reminiscent of
previous plans where there was convoluted calisthenics to try
to fix this thing. That's not what investors are looking for,"
said Bucky Hellwig, an analyst with Morgan Asset Management in
Birmingham, Alabama.
All 30 Dow stocks ended deep in the red for the first time
since Jan. 20, revealing misgivings about the plan's ability to
jump-start the economy.
The Dow Jones industrial average <> was down 381.99
points, or 4.62 percent, at 7,888.88. The Standard & Poor's 500
Index <.SPX> was down 42.73 points, or 4.91 percent, at 827.16.
The Nasdaq Composite Index <> was down 66.83 points, or
4.20 percent, at 1,524.73.
Although the Dow posted its lowest close since Dec 1, it is
still up 5.9 percent from the Nov. 21 low. The blue chip index
is down 1.4 percent for the month and 10.1 percent
year-to-date.
The S&P financial index <.GSPF> slid 10.9 percent.
Federal Reserve Chairman Ben Bernanke offered the market
little comfort in testimony to Congress on Tuesday after he
said the central bank's liquidity expansion was no "panacea."
A government report showing a record plunge in U.S.
wholesale inventories in December underscored the economy's
fragile state, suggesting that the economy contracted more in
the fourth quarter than the government initially estimated.
Shares of Bank of America <BAC.N> slid more than 19 percent
to $5.56, while JPMorgan <JPM.N> shed 9.8 percent to $24.62 and
shares of Citigroup were down 15.2 percent at $3.35.
Insurers, which like the banks are burdened by money-losing
assets on their books, were another hard-hit sector. Shares of
U.S. property and life insurer Hartford Financial Services
Group <HIG.N> slid 13.2 percent to $13.05 after its credit
ratings were cut. Rival MetLife <MET.N>, the No. 1 U.S. life
insurer, was down 12 percent to $27.53.
Principal Financial <PFG.N>, another insurer, tumbled 29.6
percent to $11.99.
The KBW Insurance ETF <KIE.P> fell 9.5 percent.
Boeing <BA.N> was among the top drags on the Dow as it
reiterated the delay in the delivery of its latest jetliner,
sending its stock down 6.1 percent to $40.21.
McDonald's <MCD.N> fell 3 percent to $57.28 and top
retailer Wal-Mart <WMT.N> slid 3.2 percent to $47.72,
reflecting concerns about the spending environment. Citigroup
cut its earnings estimate and price target on Wal-Mart
[], expecting pressure on grocers, and Wal-Mart
later in the day said it was cutting up to 800
jobs.[]
Home builder MDC Holdings Inc <MDC.N> reported results that
missed Wall Street expectations, and its shares fell 14.8
percent to $30.13. The Dow Jones home construction index
<.DJUSHB> tumbled 9.9 percent.
Volume was active on the New York Stock Exchange, where
about 1.74 billion shares changed hands, above last year's
estimated daily average volume of 1.49 billion shares, while on
the Nasdaq, about 2.45 billion shares traded, just above of
last year's daily average of 2.28 billion.
Decliners outnumbered advancers on the NYSE by a ratio of
about 11 to 2, while on the Nasdaq, about 9 stocks fell for
every 2 that rose.
(Editing by Leslie Adler)
