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Financial shares wilt on Goldman rumor: investors

NEW YORK
Wed Jun 11, 2008 11:21am EDT

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NEW YORK (Reuters) - The Standard & Poor's 500 financial sector .GSPF sank to a five-year low on Wednesday, led by declines in investment bank shares on a rumor that Goldman Sachs (GS.N) would report large writedowns when it reports quarterly figures next week, market participants said.

"There's been rumors of a large write-off to be announced at Goldman Sachs, which has caused a lot of the financial stocks to swoon a little bit. That's been the major driver, is increased fear of financials," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

Meckler's comments were echoed by others in the market.

Goldman shares were off 1.9 percent at $163.98 but off their session low of $161.21. The S&P 500 financial index was off 1.6 percent at just below 304, up from a five-year low of 301.15 set earlier in the day.

A Goldman Sachs spokesman told Reuters the company does not comment on market rumors.


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