* Obama speech yields few details
* Big-cap tech shares slide before IBM earnings
* Bank index sheds 20 percent on worries of future losses
* Dow off 4 pct, S&P off 5.3 pct, Nasdaq off 5.8 pct
* For up-to-the-minute market news, click []
(Updates to close, changes byline)
By Chuck Mikolajczak
NEW YORK, Jan 20 (Reuters) - Wall Street ushered in the
Barack Obama presidency with a record Inauguration Day drop on
Tuesday amid fresh signs the global bank crisis was far from
over.
High expectations for details on how the new
administration would address the growing banking crisis and
faltering economy were dampened after the inauguration speech
concluded with little new information to digest.
State Street Corp <STT.N>, the world's largest
institutional money manager, spooked investors about what is
considered one of the safest areas in banking when it said it
had a $6.3 billion unrealized loss in its investment portfolio
and lowered its outlook. Its shares plunged 59 percent to
$14.89.
"Stocks are getting crushed because of the never-ending
tragedy that has fallen upon the banking sector," said Tom
Sowanick, chief investment officer of Clearbrook Financial LLC
in Princeton, New Jersey.
The Dow Jones industrial average <> dropped 332.13
points, or 4.01 percent, to 7,949.09. The Standard & Poor's
500 Index <.SPX> slid 44.90 points, or 5.28 percent, to
805.22. The Nasdaq Composite Index <> tumbled 88.47
points, or 5.78 percent, to 1,440.86.
Since Obama won the election in November, Wall Street has
been betting he will put plans in place to help stabilize the
sliding economy and stem rising unemployment.
"I think the expectations were over the top to begin
with," said Marc Pado, U.S. market strategist at Cantor
Fitzgerald & Co in San Francisco. "When you have that kind of
expectation, you're going to get disappointed."
The negative tone for the financial sector was set in
Britain by the Royal Bank of Scotland <RBS.L>, which reported
the biggest loss in British corporate history on Monday, when
U.S. markets were closed for the Martin Luther King holiday.
The news sparked concerns about the global banking sector
and hurt shares of financials, including JPMorgan Chase & Co
<JPM.N>, which was the Dow's top drag.
The KBW index of banking shares <.BKX> plunged nearly 20
percent to 25.34, its lowest level since 1995. The S&P
Financial index <.GSPF> fell almost 17 percent to 108.33, its
lowest level in 14 years.
Underscoring the widespead selling, the Chicago Board
Options Exchange Volatility index <.VIX>, which is Wall
Street's favorite barometer of fear, shot up 22.9 percent, its
largest percentage gain since Oct. 22, when it rose more than
31 percent.
Although the S&P 500 has rebounded from its Nov. 21
intraday low, the broad index has fallen 10.9 percent this
year on worries about the deepening global recession.
Technology shares were pulled down by expectations of poor
quarterly results from big-cap tech companies, including
International Business Machines Corp <IBM.N>.
Big-cap tech companies also got hurt by a rise in the
dollar, which makes it difficult for overseas consumers to buy
their products, said Robert Francello, head of equity trading
for Apex Capital hedge fund in San Francisco.
IBM shed 3.5 percent to $81.98 on the New York Stock
Exchange before quarterly results, which were expected after
the bell.
In after-hours trading, IBM's stock jumped almost 5
percent to $85.98 after its fourth-quarter profit beat Wall
Street's expectations.
During the regular session, though, shares of Apple
<AAPL.O> slid 5 percent to $78.20, and Microsoft <MSFT.O> shed
6.2 percent to $18.48, in Nasdaq tradsing; both are also
expected to post quarterly results later this week.
Shares of Intel <INTC.O>, the world's largest chip maker,
fell 6.4 percent to $12.86 on Nasdaq after the company cut
the price of some processors by as much as 48 percent.
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Trading volume was active on the New York Stock Exchange,
with about 1.72 billion shares changing hands, above last
year's estimated daily average of roughly 1.49 billion, while
on Nasdaq, about 2.02 billion shares traded, below last year's
daily average of 2.28 billion.
Declining stocks outnumbered advancing ones on the NYSE by
almost nine to one, while on the Nasdaq, about six stocks fell
for every one that rose.
(Editing by Jan Paschal)
