Dow Plunges Triple Digits on Obama's Speech (JPM, MS, BAC)

President Obama's plan is not going over well with Wall Street, the selling is just getting started with JP Morgan (NYSE:JPM), Bank of America (NYSE:BAC) and Morgan Stanley (NYSE:MS) all falling close to 5%.

Jan. 21 (Bloomberg) -- U.S. stocks tumbled for a second day as a White House proposal to reduce risk-taking at banks and concern China will take more steps to slow economic growth dragged down financial companies and materials producers.

JPMorgan Chase & Co. and Morgan Stanley slumped more than 5 percent to lead the S&P 500 Financials Index down 3.3 percent, its biggest decline since October. Exxon Mobil Corp. tumbled 1.6 percent and Freeport-McMoRan Copper & Gold Inc. plunged 7.2 percent as oil and metal prices slid.

The Standard & Poor’s 500 Index slid 1.6 percent to 1,120.07 at 11:53 a.m. in New York and is down 2.6 percent over the past two days, its biggest slide since October. The Dow Jones Industrial Average slumped 194.83 points, or 1.8 percent, to 10,408.32. The Nasdaq Composite lost 1.1 percent to 2,266.98.

“Banks are under pressure as we have two policy initiatives potentially hampering their ability to make profit,” said James W. Gaul, a money manager at Boston Advisors LLC in Boston, which manages $1.7 billion. “One is the special tax on banks to pay for TARP and the other is today’s announcement on restrictions on proprietary trading, which makes up a significant amount of revenue for these firms.”