fundamentals have yet to improve, and an unexpectedly large drop in wholesale inventories raised worries about an economic recovery.
Financial stocks, which had gained about 25 percent in the last month, tumbled after Rochdale Securities analyst Richard Bove painted a gloomy outlook for the banking industry. He said bank stocks are trading on "fumes," and he expects a short-term
pull-back in their stock prices.
The Dow Jones industrial average <.DJI> closed down 96.28 points, or 1.03 percent, to 9,241.67. The Standard & Poor's 500 Index <.SPX> fell 12.77 points, or 1.27 percent, to 994.33. The technology-laced Nasdaq Composite Index <.IXIC> slid 22.51
points, or 1.13 percent, to 1,969.73.
Investors were also cautious as a two-day monetary policy meeting by the U.S Federal Reserve got under way on Tuesday. The focus will be on signs from the Fed of an exit strategy from its quantitative easing policy. Also weighing was a report on July retail sales, due Thursday.
NYMEX-NEW YORK, Aug 11 (Reuters) - U.S. crude oil futures remained down in post-settlement trading on Tuesday despite a surprise crude stock drawdown in weekly inventory data from the industry group American Petroleum Institute.
"This API report overall is mildly supportive because of the bigger-than-expected drawdown in gasoline stocks. But traders won't probably do much until tomorrow's EIA data comes in," said Phil Flynn, analyst at PFGBest Research in Chicago.
Flynn said traders were waiting for the results of the Federal Reserve's policy-setting meeting on interest rates on Wednesday.
The U.S. Energy Information Administration will release its own report on Wednesday at 10:30 a.m. EDT (1430 GMT).
On the New York Mercantile Exchange, September crude
CBOT-SOYBEANS - August
News China bought more U.S. soy and shrinking supply of soybeans lifting market. Positioning noted ahead of the release early on Wednesday of USDA's August crop reports.
CBOT-SOYOIL - August soyoil
FCPO-JAKARTA, Aug 11 (Reuters) - Malaysian palm oil futures rose 2.7 percent on Tuesday to their highest closing in two months, reversing early losses as investors bet on good demand prospects after seeing a pick up in physical buying, traders said.
The benchmark October contract
REGIONAL EQUITIES-BANGKOK, Aug 11 (Reuters) - Singapore shares rose almost 2
percent on Tuesday as slightly better-than-expected second-quarter GDP data cheered the market and boosted index heavyweights such as Oversea-Chinese Banking Corp and SingTel. The government's warning that the pace of growth might not be sustained failed to dent the mood.
Malaysia's index <.KLSE> edged down 0.14 percent and Thailand's <.SETI> inched down 0.11 percent, but the Philippine index <.PSI> eked out a small gain of 0.4 percent and Vietnam's <.VNI> ended 0.6 percent higher.
In Kuala Lumpur, AMMB Holdings