Financial stocks have posted the biggest drop among 10 industry groups in the S&P 500 this year amid concern that higher borrowing costs sparked by subprime mortgage defaults will erode earnings from trading and debt underwriting. Reports today on home prices and consumer confidence may help investors gauge the outlook for economic growth.
Stocks in Europe and Asia declined, led by financial companies on concern the subprime mortgage rout is spreading and will erode global economic growth. The Morgan Stanley Capital International World Index slipped 0.2 percent to 1,545.31.