U.S. Stocks Drop

U.S. stocks extended declines after consumer confidence tumbled, analysts said mortgage-related writedowns will keep reducing earnings at Wall Street firms and home prices in 20 U.S. metropolitan areas fell in January by the most on record.

Merrill Lynch & Co. slid after JPMorgan Chase & Co. cut its profit estimate for the third-largest U.S. securities firm by 45 percent. Bank of America Corp. fell on a Merrill report advising clients to sell the second-biggest U.S. bank. Lehman Brothers Holdings Inc. and Goldman Sachs Group Inc. dropped on lowered earnings projections from Fox-Pitt Kelton Cochran Caronia Waller.

The Standard & Poor's 500 Index dropped 8.54, or 0.6 percent, to 1,341.34 at 10:02 a.m. in New York. The Dow Jones Industrial Average fell 87.19, or 0.7 percent, to 12,461.45. The Nasdaq Composite Index slipped 11.08, or 0.5 percent, to 2,315.67. Asian and European shares advanced on speculation JPMorgan Chase & Co.'s takeover of Bear Stearns Cos. will reduce the risk of banks collapsing.

TradingEconomics.com, Bloomberg
3/25/2008 7:24:28 AM