* U.S. home sales hit a record low in February
* Fed tells Bank of America to rein in dividend plan
* Portugal set to vote on austerity measures
* Indexes down: Dow 0.4 pct, S&P 0.7 pct, Nasdaq 0.7 pct
* For up-to-the-minute market news see [STXNEWS/US] (Updates to early morning trade)
By Angela Moon
NEW YORK, March 23 (Reuters) – Wall Street stocks fell on Wednesday after disappointing new home sales data and a Federal Reserve rejection of a dividend plan by Bank of America weighed on banks and home building shares.
U.S. new home sales fell in February to a record low and prices were the lowest since December 2003, suggesting the housing market slide was deepening. For details, see STORY: [ID:nCAT005396] TABLE [ID:nCLANEE7CK]
Bank of America Corp (BAC.N) shares were down 2.2 percent at $13.59, weighing the most on the Dow index, after the Fed objected to the bank’s plans to boost dividends in the second half of 2011 and told the bank to revise its proposal. For details, see [ID:nN23228260]
The KBW bank index .BKX fell 1.4 percent. Citigroup Inc (C.N) shares dropped 1.4 percent at $4.36 and JPMorgan Chase & Co (JPM.N) fell 1.1 percent to $44.96.
Among home builders, Toll Brothers Inc (TOL.N) fell 1.6 percent to $20.16 and D.R. Horton Inc (DHI.N) lost 1.4 percent to $11.68.
“What’s been happening now for the past 18 months or so is we’ve seen a relative low in a lot of housing stocks, meaning they’re bouncing along the bottom. That’s typically a good sign since they tend to lead the housing market by three to nine months,” said Adam Sarhan, chief executive of Sarhan Capital in New York. “As long as the recent lows aren’t taken out, we’d expect some sort of stabilization to occur.”
The Dow Jones industrial average .DJI was down 41.74 points, or 0.35 percent, at 11,976.89. The Standard & Poor’s 500 Index .SPX was down 9.03 points, or 0.70 percent, at 1,284.74. The Nasdaq Composite Index.IXIC was down 17.46 points, or 0.65 percent, at 2,666.41. (Reporting by Angela Moon; Editing by Padraic Cassidy)