Stocks Decline as Goldman Sachs Says Banks May Have to Raise More Capital

[Purveyor]

June 17 (Bloomberg) -- U.S. stocks fell for the first time in four days as Goldman Sachs Group Inc. predicted banks will have to raise $65 billion in new capital to cover losses and housing starts and industrial production trailed forecasts.

The S&P 500 lost 9.21 points, or 0.7 percent, to 1,350.93. The Dow Jones Industrial Average declined 108.78, or 0.9 percent, to 12,160.3. The Nasdaq Composite Index slid 17.05, or 0.7 percent, to 2,457.73. Two stocks decreased for each that advanced on the New York Stock Exchange.

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Regional Banks Tumble

Zions, the lender with operations in 10 western U.S. states, tumbled 10 percent to $33.37 for the steepest decline in the S&P 500. Weakness in residential construction and land values in the Southwest will harm loans and is ``expected to persist into 2009,'' Zions said in a presentation attached to a regulatory filing today.

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$65 Billion More

Large lenders also declined. The Goldman analysts said U.S. banks may need to raise $65 billion in additional capital as losses and writedowns continue into the first quarter of 2009. Declining home prices, expected to continue falling through the year, are driving the deterioration in the credit markets, Goldman said.

BLOOMBERG: http://www.bloomberg.com/apps/news?pid=20601103&sid=ape1poJ2Klco&refer=news