U.S. Stocks Decline on Citigroup's Loss, Drop in Retail Sales

The U.S. stock market resumed its January tumble after Citigroup Inc. reported a record loss, retail sales unexpectedly dropped and falling oil prices dragged down energy shares
TradingEconomics.com, Bloomberg 1/15/2008 1:38:19 PM

Citigroup, the largest U.S. bank, declined to a five-year low in New York Stock Exchange trading after cutting its dividend by 41 percent and writing off $18 billion for mortgage defaults. Chevron Corp., the second-biggest U.S. oil company, dropped the most in seven weeks. Apple Inc. tumbled to the lowest in two months on the Nasdaq Stock Market after new products failed to impress investors.

The Standard & Poor's 500 Index lost 35.3, or 2.5 percent, to 1,380.95, marking its worst start since the first 10 trading days of 1978. The Dow Jones Industrial Average slid 277.04, or 2.2 percent, to 12,501.11, the fifth decline of more than 220 points this year. The Nasdaq Composite Index decreased 60.71, or 2.5 percent, to 2,417.59. More than seven stocks fell for every one that rose on the NYSE.

The declines added to three-straight weeks of losses that wiped out more than $800 billion in value from U.S. shares and sent the S&P 500 to its lowest level since March. Treasuries rallied, pushing the 10-year note's yield to the lowest since 2004, and the dollar slid against the yen after the Commerce Department report on December retail sales fueled concern about a recession.

Financial companies in the S&P 500 are projected to report a 69 percent average drop in profits in the fourth quarter, dragging earnings for the overall index down 10 percent, according to a Bloomberg survey of analysts.

Merrill Lynch & Co. and Citigroup turned to outside investors for a second time in two months to replenish capital. Banks have received $59 billion from investors, mostly in the Middle East and Asia, to shore up balance sheets battered by more than $100 billion of writedowns from mortgage-related losses.

U.S. Stocks Decline on Citigroup