President Barack Obama's plan to change the way big banks make their money plunged the stock market back into the fear and uncertainty that marked the financial crisis.
Obama said Thursday that he would ask Congress for limits on how big banks can become and to end some of the risky trades financial companies use to supercharge their earnings. Investors sent stocks tumbling as they worried the plan would destabilize Wall Street's 10-month rally.
Investors have known changes were coming to the nation's banking system, but the plan to reshape the way companies do business went beyond what some traders expected, and it raised concerns that profits would suffer.
Traders fled from the banks with the most to lose. Bank of America, Citigroup Inc. and JPMorgan Chase & Co. each lost more than 5 percent.
Todd Leone, managing director of equity trading at Cowen & Co. in New York, said some rules need to be changed but that the government was reaching too far.
"They kind of stabbed themselves and there should be some limitations on them," Leone said of large financial companies. "But you have to let these guys run their businesses. I think they're too involved and I think that's why people are upset."The Dow Jones industrial average fell 213.27 points, or 2.01 percent, to 10,389.88, its biggest point and percentage drop since Oct. 30. The Standard & Poor's 500 index fell 21.56, or 1.89 percent, to 1,116.48. The Nasdaq composite index fell 25.55, or 1.12 percent, to 2,265.70.- AP