Market drops as financial shares decline

The S&P financial index was down nearly 4 percent as shares of Bank of America slid more than 14 percent to $27.34, a day after it announced a plan to raise as much as $10 billion to shore up its capital.

The bank also slashed its dividend and posted a slide in quarterly profit in a surprise announcement.

Investors had bet that after Monday's global equity slide -- that took the Dow below 10,000 for the first time in four years -- central banks might mount a coordinated response to calm jittery investors.

Instead, the only news of rate cuts came out of Australia, which slashed rates by a full percentage point, and from India, which said it would cut the proportion of deposits that banks keep with the central bank.

The Dow Jones industrial average fell 68.10 points, or 0.68 percent, to 9,887.40. The Standard & Poor's 500 Index shed 7.74 points, or 0.73 percent, to 1,049.15. The Nasdaq Composite Index declined 16.87 points, or 0.91 percent, to 1,846.09.

(Reporting by Ellis Mnyandu; Editing by Kenneth Barry)