U. S. stocks fell for a third day, the longest losing streak for the Standard & Poor’s 500 Index since June, as concern banks will post more losses overshadowed manufacturing and housing data that topped economist estimates.

Wells Fargo & Co. slid the most in two weeks even after saying it will pay back government bailout funds without selling stock. Bank of America Corp. declined 6.4 percent to lead the Dow Jones Industrial Average lower. American International Group Inc. plummeted 21 percent and MetLife Inc. tumbled 7.4 percent after analysts said the insurers’ shares have risen too far, too fast. Yesterday retreat came at the start of what is historically the worst month for stocks, with the benchmark index losing 1.3 percent on average in September since 1928, according to data compiled by Bloomberg.

U. S. stocks fell even after the Institute for Supply Management said manufacturing expanded in August for the first time in 19 months and the National Association of Realtors said contracts to buy pending homes increased more than forecast in July. The ISM gauge of factories climbed to 52.9 in August, topping the average economist estimate of 50.5.

China’s stocks rose for a second day, led by energy producers and financial companies, after the government raised fuel prices and Premier Wen Jiabao said a moderately loose monetary policy will be maintained. Premier Wen said the economy is at a “critical phase” of its recovery and the government will stick to its pro-active fiscal policy, the official Xinhua news agency reported yesterday.

Today morning Copper for December delivery declined by as much as 3.6 percent to 47,600 yuan a metric ton on the Shanghai Futures Exchange, leading a drop in industrial metals. Aluminum fell 1.6 percent to 14,720 yuan and zinc dropped 2.1 percent to 14,775 yuan. Asian stocks fell, giving the MSCI Asia Pacific Index its biggest drop in two weeks, as Seven & I Holdings Co. Japan’s largest retailer, cut its full-year profit forecast and commodity prices declined.

What we saw yesterday is even economic data came better than expected, the equity market declined. The fear of withdrawal of the life jacket provided by various governments to their economy in the form of monetary infusion will be withdrawn at some point of time and whether the economy will sustain the bounce back at that time, is a matter of concern for investors. Along with that the valuation are rich today.