March 9 (Bloomberg) -- U.S. stocks fell, extending the worst weekly slump in the Standard & Poor’s 500 Index since November, after Warren Buffett said the economy “has fallen off a cliff” and the World Bank predicted a global contraction.
Aflac Inc., the largest provider of supplemental insurance, dropped 19 percent after UBS AG recommended selling the shares. Stocks in Europe and Asia declined as the U.K. government took control of Lloyds Banking Group Plc, Britain’s biggest mortgage lender. Capital One Financial Corp. slid 5.7 percent after cutting its quarterly dividend by 87 percent. Schering-Plough Corp. rallied 12 percent as Merck & Co. agreed to buy the drugmaker for $41.1 billion.
The S&P 500 decreased 0.8 percent to 677.80 at 9:31 in New York. The Dow Jones Industrial Average fell 63.88 points, or 1 percent, to 6,563.06. Europe’s Dow Jones Stoxx 600 Index retreated 2.5 percent, and the MSCI Asia Pacific Index slumped 1.9 percent.
“Uncertainty reigns,” said David Sowerby, who helps oversee about $100 billion at Loomis Sayles & Co. in Bloomfield Hills, Michigan. “From continued concern with the economy and autos to financials and earnings. What’s the floor on the S&P? It’s never ending.”
U.S. stocks last week posted the biggest decline in three months after American International Group Inc. reported a $61.7 billion loss, Buffett said the economy is in “shambles” and concern increased that General Electric Co. will be stripped of its top credit rating. General Motors Corp. sank 36 percent, the most since October, after its auditor said the automaker may not survive.
Expensive Shares
Aflac lost 19 percent to $10.95 after UBS reduced its recommendation to “sell” from “neutral,” saying the shares are expensive relative to other life insurance companies.
http://www.bloomberg.com/apps/news?pid=20601103&sid=ajASOQg7NKkk&refer=us
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