U.S. Stocks Drop on Economic Concern


U.S. stocks fell the most in a week after government reports on durable goods and employment heightened concern growth is slowing and an analyst predicted Citigroup Inc. will cut its dividend by 40 percent.

DuPont Co., International Business Machines Corp. and Microsoft Corp. dropped after orders for durable goods other than transportation equipment declined. Citigroup, the biggest U.S. bank, fell the most in the Dow Jones Industrial Average after Goldman Sachs Group Inc. analyst William F. Tanona also said it may write down more assets.

The Standard & Poor's 500 Index lost 11.51, or 0.8 percent, to 1,486.15 as of 11:05 a.m. in New York. The Dow average decreased 117.3, or 0.9 percent, to 13,434.39. The Nasdaq Composite Index retreated 24.11, or 0.9 percent, to 2,700.3. About five stocks fell for every two that gained on the New York Stock Exchange.

Stocks turned lower before the U.S. economic reports were released on concern the assassination of Pakistani opposition leader Benazir Bhutto will further destabilize the region.

Orders for U.S. durable goods rose 0.1 percent in November, trailing the median forecast of a gain of 2 percent in a Bloomberg survey of economists. Demand was restrained by a slump in defense procurement and declines in capital equipment. Excluding transportation equipment, durables orders fell 0.7 percent, compared with a forecast for a 0.5 percent increase.

The number of people claiming unemployment insurance benefits reached a two-year high of 2.713 million, a separate report showed. The deepest housing slump in 16 years is causing job losses at construction companies and mortgage lenders.

 


Bloomberg
12/27/2007 10:14:43 AM