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US stocks slide as banks and other financial companies struggle

Banks and other financial companies have led a slide in US stocks, erasing some of the gains from a day earlier when indexes soared to record highs.

Materials and industrial companies also fell sharply while energy stocks declined along with the price of crude oil. Utilities and phone company stocks bucked the broader market slide.

Investors mostly focused on the latest batch of company news and earnings reports. Traders had an eye on the Federal Reserve amid growing speculation this week that the central bank will raise interest rates again later this month.

"You have the market wondering if the economy is in fact strong enough for a rate hike at this point," said Quincy Krosby, market strategist at Prudential Financial. "After the run-up we had yesterday, this is a good excuse for the market to pause."

The Dow Jones industrial average lost 112.58 points, or 0.5%, to 21,002.97. The Standard & Poor's 500 index fell 14.04 points, or 0.6%, to 2,381.92. The Nasdaq composite index slid 42.81 points, or 0.7%, to 5,861.22.

Small-company stocks fell more than the rest of the market. The Russell 2000 index gave up 17.97 points, or 1.3%, to 1,395.67.

The stock market was coming off its biggest single-day gain in nearly four months.

Bond prices fell, pushing yields higher. The 10-year Treasury yield rose to 2.48% from 2.46% late on Wednesday.

Several Federal Reserve officials, including chairwoman Janet Yellen, are scheduled to speak this week ahead of their next policy meeting later this month.

Earlier this week, New York Fed president William Dudley said the case for raising interest rates had got stronger. That has helped fuel speculation that the central bank will raise interest rates again this month.

"While it's plausible the Fed lets the U.S. economy run hot before acting, the economic backdrop, in our view, warrants a Fed hike in March," said Terry Sandven, chief equity strategist at US Bank Wealth Management. "In a slow-growth, improving environment we think that's favourable for equities."

AP

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