US STOCKS-Banks drag Wall St lower, Google jumps after the bell

* Banks slide on worries about U.S.-wide mortgage probe

* Apollo Group tumbles, for-profit education sector follows

* Google, AMD jump after hours following results

* Dow flat, S&P down 0.4 pct, Nasdaq off 0.2 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates Google and volume, adds AMD and dollar details)

By Rodrigo Campos

NEW YORK, Oct 14 (BestGrowthStock) – Banks led U.S. stocks (Read more about the stock market today. ) lower on
Thursday as investors fretted a widening foreclosure crisis
could undermine the market’s strength over the last five

The S&P 500 has rallied 11.9 percent since Sept. 1 and
volume has picked up from anemic levels. But the rally could
weaken as an index of bank stocks fell nearly 3 percent on
Thursday over growing fears the foreclosure problems could
bleed into the broader credit markets and the economy.

“As we all know, the market hates uncertainty and this is a
big one. Remember the subprime mess?,” said Joe Saluzzi,
co-head of trading at Themis Trading in Chatham, New Jersey.

But the technology sector continued to show strength, with
Google Inc (Read more about Google Stock Analysis) (GOOG.O: ) up more than 9 percent in extended trading
after beating Wall Street’s expectations. [ID:nN14187391].

Chipmaker Advanced Micro Devices Inc (AMD.N: ) jumped more
than 7 percent after hours on the back of another profit beat.

During the regular session, JPMorgan Chase & Co (JPM.N: )
lost 2.8 percent to $38.72 and Bank of America (BAC.N: ) fell 5.2
percent to $12.60, while the KBW bank index (.BKX: ) dropped 2.6

All 50 U.S. states are investigating the mortgage industry,
and investors are growing concerned it will hurt bank earnings.

Fears about lenders’ strength could be seen earlier in the
week in credit derivatives, as the cost of insuring bank debt
against default has jumped.

The Dow Jones industrial average (.DJI: ) dipped 1.51 points,
or 0.01 percent, to 11,094.57. The Standard & Poor’s 500 (.SPX: )
dropped 4.29 points, or 0.36 percent, to 1,173.81. The Nasdaq
Composite (.IXIC: ) shed 5.85 points, or 0.24 percent, to


To be sure, some say the foreclosure issues, which have
been brewing for weeks, were being used as an excuse for
investors to pull back from the solid gains since the beginning
of September.

The pickup in the last hour of trading, which erased most
of the Dow’s loss, could be evidence of that.

“You could use the bank story as an excuse, but after the
run-up we’ve had, the market needs a pullback,” said Jeffrey
Frankel, president of Stuart Frankel & Co in New York. “This is
healthy, not a bad situation.”

About 9.04 billion shares traded on the New York Stock
Exchange, the American Stock Exchange and the Nasdaq, above
this year’s daily average of 8.78 billion.

Declining stocks outnumbered advancing ones on the NYSE by
a ratio of about 3 to 2, while on the Nasdaq, about seven
stocks fell for every six that rose.

Apollo Group’s (APOL.O: ) shares plunged, dragging the stocks
of for-profit education companies down to six-week lows after
the sector bellwether withdrew its 2011 outlook and forecast
sharp drops in new student enrollments.

Apollo shares sank 23.2 percent to $38 and led declines in
the Nasdaq 100 (.NDX: ).

The U.S. dollar’s slide helped limit stocks’ losses, as a
weaker greenback puts a bid under commodities and other assets
denominated in the U.S. currency.

New claims for jobless benefits unexpectedly rose in the
latest week. The data reinforced the view that the Federal
Reserve will engage in another round of printing money to
support a sluggish economic recovery. [ID:nN14277059].

The dollar index (Read more about the global trade. ) (.DXY: ) dropped 0.7 percent to 76.542, its
lowest level since December.
(Reporting by Rodrigo Campos; Additional reporting by Caroline
Valetkevitch; Editing by Jan Paschal)

US STOCKS-Banks drag Wall St lower, Google jumps after the bell