Stocks sink; Banks rise on BofA deal

The Dow lost 171 points, the S&P 500 closed down 18, and the Nasdaq fell 48, ending a three-day streak of gains

Richard Drew/AP
Tribal members in Native American dress visit the trading floor of the New York Stock Exchange Thursday, Aug. 25, 2011, during ceremonies celebrating NativeOne, becoming the exchange’s first Native American-owned member.

A three-day rally is ending much like it began, with a steep and sudden turn.

Stocks started higher early Thursday but turned lower within 20 minutes. Indexes in the U.S. and Europe sank after Germany's main stock index suddenly lost 4 percent. Traders were at a loss to explain the move.

Bank of America Corp. led other banks higher on news that Warren Buffett will invest $5 billion in the bank.

The Dow fell 171 points, or 1.5 percent, to close at 11,150. The S&P 500 index fell 18 points, or 1.6 percent, to 1,159. The Nasdaq fell 48 points, or 2 percent, to 2,420.

More than three stocks fell for every one that rose on the New York Stock Exchange. Trading volume was above average at 5 billion shares.

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