U.S. Stocks End At Lowest Levels So Far For 2008
NEW YORK (MarketWatch) -- U.S. stocks plunged Tuesday, with the major indexes all closing at their lowest levels yet this year, after dismal December retail sales heightened anxieties about the economy and raised questions about the Federal Reserve's ability to stem the damage.
"The real problem with the market is confusion. There is concern the government itself is detached from what is going on," said Doug Roberts, chief investment strategist for Channel Capital Research.com.
"Is the Fed behind the curve? Are we in a recession? These are the big things people are wrestling with, and the Fed at this point will have to start making more comments to allay the markets," Roberts said.
The Dow Jones Industrial Average , which has shed nearly 6% of its value since the year began, fell 277 points -- or 2.2% -- to end at 12,501.1. With financial stocks paving the way, all of the Dow's 30 components closed with losses.
Share of Citigroup fell 7.6%; J.P. Morgan Chase & Co. declined 5.3%, American International Group Inc. sank 2.5% and American Express Co. dropped 3.9%. .
Art Hogan, chief market strategist at Jefferies & Co., expects the current pattern of one down session to be following by a reversal the following day would hold.
"I don't think people are going to press their shorts overnight," said Hogan.
Off the Dow, Bank of America Corp. said it would cut 650 jobs from its global investment banking and global markets businesses as part of a strategic review the bank began in October.
Bank of America shares ended off 3.1%.
The broader indexes also fell, with the S&P 500 finishing down 35.3 points, or 3.4%, at 1,380.95.
The Nasdaq Composite shedding 60.71 points, or 2.5%, to 2,417.59.
Technology shares sold off amid the broader market weakness, with shares of Apple Inc. falling 5.4% as CEO Steve Jobs addressed the company's annual Macworld show in San Francisco. .
On the New York Stock Exchange, trading volume topped 1.8 billion, while nearly 2.4 billion shares exchanged hands on the Nasdaq. Declining stocks overtook advancing issues roughly 3 to 1 on both exchanges.
Crude-oil futures fell more than $2 on expectations that U.S. inventories may have risen for the first week in nine, with crude for February delivery closing down $2.3, or 2.4%, at $91.9 a barrel. .
Also on the New York Mercantile Exchange, gold futures fell 80 cents to finish at $902.60 an ounce.
Retail ails, financials founder
Underscoring investors' fears about the economy, the Commerce Department reported December retail sales fell 0.4%, the first such decline in six months and a performance worse than analysts had projected. .
Separately, the Labor Department said producer prices declined 0.1% last month, while core producer prices, which exclude food and energy, climbed 0.2%. .
Shares of retailer Williams-Sonoma retreated 9.9% after the company issued a warning on its sales and profit outlook.
Citigroup, the largest U.S. bank, set aside $539 million in the fourth quarter to cover job cuts including those already announced and those pending, CEO Vikram Pandit told a conference call Tuesday morning.
"You can interpret this current quarter's $539 million charge as a down payment on the productivity efforts we are working on," Pandit said.
Earlier, Citigroup reported its first quarterly loss since 1998 -- a fourth-quarter hit of $9.83 billion -- while also raising more than $12 billion in new capital needed in the aftermath of massive write-downs tied to the company's exposure to the U.S. subprime meltdown. .
Further evidence of the credit upheaval came from State Street Corp. , which reported a fourth-quarter profit that fell 28%, as the financial-services firm took a $279 million charge.
State Street's shares ended off 5.9%.
Shares of Merrill Lynch & Co. declined 5.3%. The Wall treet powerhouse said it had drawn $6.6 billion in fresh cash from several investors, including a trio from the Middle East and Asia, to shore up its capital position. .
A rare gainer among financials was U.S. Bancorp , up fractionally in the aftermath of its fourth-quarter results issued before the bell.
Overnight, Asian stocks closed lower, with Japanese shares extending a streak of losses. .
And in Europe, it was a similar story: Shares fell to 16-month lows. .
By Kate Gibson