By Michael Patterson
June 30 (Bloomberg) -- U.S. stocks fell, dragging the Dow Jones Industrial Average down 20 percent from its October peak, as concern grew that banks and bond insurers are running short of cash and corporate profits will be hurt by record oil prices.
MBIA Inc., the world's biggest securities guarantor, tumbled to an all-time low on a report that the company is selling municipal bonds to raise cash. Wachovia Corp., the fourth-largest U.S. bank, slid to the lowest in 16 years after the New York Post said the company may have to buy back a stake in a joint venture. UAL Corp., operator of United Airlines, and General Motors Corp., the largest U.S. automaker, declined as crude rose to a record above $143 a barrel.
The Dow lost 25.56, or 0.2 percent, to 11,320.95, extending its worst June retreat since 1930. The Standard & Poor's 500 Index slipped 0.24 point to 1,278.41 at 10:17 a.m. in New York. The Nasdaq Composite Index decreased 5.95 to 2,309.68. About four stocks fell for every three that rose on the New York Stock Exchange.
``I really wouldn't fight the trend at this point,'' Malcolm Polley, who helps oversee about $1 billion as president and chief investment officer at Stewart Capital Advisors, said in Bloomberg Television interview from Pittsburgh. ``Earnings expectations are going to have to come back for the second half.''
The Dow has slumped more than 10 percent in June, extending its 2008 retreat to almost 13 percent, as record oil prices and $400 billion in global credit losses spur concern that earnings will slump for a fourth straight quarter. Citigroup Inc. strategist Tobias Levkovich said in a note to clients that analysts' profit estimates are still too high and projections for technology and industrial companies are ``excessive.''
-- Editors: Michael Regan, Chris Nagi