Asia tumbles after Wall Street slide

Nikkei, KOSPI and Hang Seng all fell in early trading.
Asian and Pacific markets tumbled on Tuesday, following a rocky day on Wall Street.

The Nikkei average was down 3.4 percent at the midday break, while the All Ordinaries index in Australia had slipped 2.7 percent. In Seoul, the KOSPI slipped 1.9 percent and Hong Kong’s Hang Seng index was off 3.9 percent. On Wall Street, stocks tumbled Monday as a six-week old rally lost steam on worries about financial sector earnings, despite Bank of America’s better-than-expected quarterly results. The Dow Jones industrial average lost 290 points, or 3.6 percent. It was the biggest one-day selloff on a point basis since March 2. The S&P 500 index fell 37 points, or 4.3 percent. The Nasdaq composite lost 65 points, or 3.9 percent. The S&P 500 has advanced almost 29 percent during the past six weeks on bets that the economy is closer to finding its footing. The gains followed a selloff that left the broad index at a more than 12-year low. Some better-than-expected profit reports over the past week have helped sentiment. But investors seem to be skeptical of some of the financial sector results, many of which have been soundly beating forecasts, including JPMorgan Chase, Goldman Sachs and Citigroup. “It’s always about the financials. They brought us up and they bring us back down,” said Joseph Saluzzi, co-head of equity trading at Themis Trading. “We had a nice run over six weeks, but it was still a bear market rally,” he said. “Now today, people are looking at Bank of America and asking how they could have earned what they did and whether it’s just a one-time thing.”

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Bank of America reported a first-quarter profit of $4.2 billion that handily topped forecasts. But the company also warned about deteriorating credit quality, and that sent shares lower. Bank of America shares lost 24 percent.

Citigroup, Wells Fargo, JPMorgan Chase and American Express were among the other bank shares falling. In other global trading, European markets ended lower Monday.