Any excitement on Wall Street about Barack Obama’s inauguration was drowned out this morning by worries over Europe’s banking sector, the Journal reports. The Dow dropped more than 110 points, while the Nasdaq and S&P dropped 2% and 2.2% respectively. Those tumbles track drops in Europe after the Royal Bank of Scotland warned of huge losses and the UK government readied a second bailout.
Worries about the British government’s exposure to financials sent the pound plummeting to less than $1.40, a historic low. In US financials, State Street plunged 51% after Friday’s revelation that it’s sitting on some $9.1 billion in unrealized losses. Regions Financial reported a $6.2 billion loss, sending shares down more than 10%. Oil, meanwhile, fell below $34 a barrel as investors remained pessimistic about the global economy. (Read more stock market stories.)