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MARKET SNAPSHOT: U.S. Stocks Drop; Dow Closes Below 13,000 Level
November 19, 2007: 04:21 PM EST
U.S. stocks accelerated their losses Monday to trade at three-month lows with investors disheartened by Goldman Sachs' downgrade of Citigroup Inc. and the broker's projection of more credit-related hits ahead at the banking powerhouse.
"News that Goldman Sachs downgraded Citigroup to sell heightened jitters in stocks, while forecasts of a weak holiday shopping season added to market fears of a U.S. recession down the road," said analysts at Action Economics.
The Dow Jones Industrial Average (DJI) fell 218.3 points, or 1.7%, to 12, 958.4, with just three of its 30 components ending in positive territory.
Last week, the Dow fell below the key psychological level of 13,000 in intraday trade in two out of five trading sessions, yet still closed above 13, 000. The Dow last closed below 13,000 Aug. 16.
General Motors Corp. (GM) fronted the Dow's decline, its stock off 8.5%. Other blue-chip laggards include Citigroup (C) , off 5.9% and AT&T Inc. (T) , down 4.6%.
Citigroup was downgraded to sell from neutral by Goldman Sachs, with the broker seeing up to $15 billion in write-downs from collateralized debt obligations during the next two quarters. .
The downgrade was one of multiple developments related to the ongoing credit crunch. .
The S&P 500 (SPX) was down 25.47 points, or 1.8%, to 1,433.27, while the Nasdaq Composite (RIXF) declined 43.86 points, or 1.7%, to 2,593.38.
On the New York Mercantile Exchange, crude-oil futures gained 80 cents to end at $94.64 a barrel.
At a rare summit, the Organization of Petroleum Exporting Countries said it would not change output. .
Treasurys rallied , while the dollar was slightly higher against most major counterparts, but fell modestly against the yen. .
Gold futures fell sharply after losing more than $47 the prior week, with the contract for December delivery off $9 to close at $778 an ounce. .
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Volume on the New York Stock Exchange came to 1.7 billion, and declining stocks topped those advancing about 5 to 1. On the Nasdaq, nearly 2.2 billion shares were traded, and declining stocks outpaced advancers about 4 to 1.
Credit loses
Reinsurance company Swiss Re on Monday reported $1.1 billion in subprime- related losses.
Stricken mortgage bank Northern Rock PLC on Monday warned that takeover proposals received so far are "materially below" its closing price on Friday. .
Home improvement retailer Lowe's Cos. (LOW) reported third-quarter profit fell 10%, partly due to the troubled housing market.
The slide in equities deepened after the National Association of Home Builders reported its housing market index held steady at a record-low 19 in November, with the October index revised up slightly to 19 from an initial estimate of 18.
"Builders understand that there's a huge amount of excess inventory to work off, and they don't think that's going to happen until the latter half of 2008," said MarketWatch real estate editor Steve Kerch. Listen to Kerch.
Xerox Corp. (XRX) declared its first dividend in six years, while backing its view for 2007 earnings per share.
Overseas
In Europe, stocks lost ground for the third session in a row, with the insurance sector under pressure. .
In Asia, several markets came off their day's highs to end lower after a volatile session. .
November 19, 2007: 04:21 PM EST
U.S. stocks accelerated their losses Monday to trade at three-month lows with investors disheartened by Goldman Sachs' downgrade of Citigroup Inc. and the broker's projection of more credit-related hits ahead at the banking powerhouse.
"News that Goldman Sachs downgraded Citigroup to sell heightened jitters in stocks, while forecasts of a weak holiday shopping season added to market fears of a U.S. recession down the road," said analysts at Action Economics.
The Dow Jones Industrial Average (DJI) fell 218.3 points, or 1.7%, to 12, 958.4, with just three of its 30 components ending in positive territory.
Last week, the Dow fell below the key psychological level of 13,000 in intraday trade in two out of five trading sessions, yet still closed above 13, 000. The Dow last closed below 13,000 Aug. 16.
General Motors Corp. (GM) fronted the Dow's decline, its stock off 8.5%. Other blue-chip laggards include Citigroup (C) , off 5.9% and AT&T Inc. (T) , down 4.6%.
Citigroup was downgraded to sell from neutral by Goldman Sachs, with the broker seeing up to $15 billion in write-downs from collateralized debt obligations during the next two quarters. .
The downgrade was one of multiple developments related to the ongoing credit crunch. .
The S&P 500 (SPX) was down 25.47 points, or 1.8%, to 1,433.27, while the Nasdaq Composite (RIXF) declined 43.86 points, or 1.7%, to 2,593.38.
On the New York Mercantile Exchange, crude-oil futures gained 80 cents to end at $94.64 a barrel.
At a rare summit, the Organization of Petroleum Exporting Countries said it would not change output. .
Treasurys rallied , while the dollar was slightly higher against most major counterparts, but fell modestly against the yen. .
Gold futures fell sharply after losing more than $47 the prior week, with the contract for December delivery off $9 to close at $778 an ounce. .
.
Volume on the New York Stock Exchange came to 1.7 billion, and declining stocks topped those advancing about 5 to 1. On the Nasdaq, nearly 2.2 billion shares were traded, and declining stocks outpaced advancers about 4 to 1.
Credit loses
Reinsurance company Swiss Re on Monday reported $1.1 billion in subprime- related losses.
Stricken mortgage bank Northern Rock PLC on Monday warned that takeover proposals received so far are "materially below" its closing price on Friday. .
Home improvement retailer Lowe's Cos. (LOW) reported third-quarter profit fell 10%, partly due to the troubled housing market.
The slide in equities deepened after the National Association of Home Builders reported its housing market index held steady at a record-low 19 in November, with the October index revised up slightly to 19 from an initial estimate of 18.
"Builders understand that there's a huge amount of excess inventory to work off, and they don't think that's going to happen until the latter half of 2008," said MarketWatch real estate editor Steve Kerch. Listen to Kerch.
Xerox Corp. (XRX) declared its first dividend in six years, while backing its view for 2007 earnings per share.
Overseas
In Europe, stocks lost ground for the third session in a row, with the insurance sector under pressure. .
In Asia, several markets came off their day's highs to end lower after a volatile session. .