Financials Key Downward Spiral

Financials keyed major market losses as high-level personnel shuffles at Wachovia and Washington Mutual, plus a report by Standard and Poor that downgraded the ratings of several prominent banks, disconcerted investors, MarketWatch notes. The Dow lost 134.50 to settle at 12,503.82, and the Nasdaq lost 31.13, closing at 2,491.53. The S&P 500 lost 14.71, ending the day at 1,385.67.

Standard and Poor downgraded Lehman Brothers, Merrill Lynch and Morgan Stanley due to the probability of more mortgage-related writedowns. Wachovia hit its lowest share price in over a decade after announcing that Ken Thompson will step down as CEO and chairman, and WaMu announced that chairman Kerry Killinger will be replaced, generating suspicion that both firms have more losses on the horizon. (More Dow Jones stories.)