April 07, 2009

Renewed concern about the banking industry helped to stall the stock market yesterday after a prominent analyst said major banks still face crippling losses.Mike Mayo, an analyst with Calyon Securities, warned investors to stay clear of large bank stocks because, he said, many firms have yet to acknowledge the full extent of existing losses on mortgage loans even as problems spread into new categories of loans.Yesterday's dip in the major indexes came on the heels of a four-week rally that marked the longest rise since 2007.

But several investors said the decline was not a serious cause for concern."We've had a really good run here," said Andrew Brooks, head of stock trading at T. Rowe Price. "It should be of no surprise to anybody that we're sort of pulling back a little bit."Mayo's report launches what is likely to be a month of anxiety about the health of major banks. Most public companies, including banks, will report first-quarter earnings in the next few weeks. Investors said they are expecting most of those results to be poor but are on the lookout for signs of underlying strength -- or weakness -- in the nation's economy.