Stocks finished down, but well off their lows Monday, as Citigroup announced that it would take an additional $ 8 billion- $11 billion in writedowns. The Dow Jones Industrial Average fell 51.7 points (-0.38%), Standard & Poor's 500 index traded 7.5 points lower (-0.50%), and the Nasdaq lost 15.2 points (-0.54%). Volume on the NYSE was a little lighter than at the end of last week at 1.52 billion, and decliners outnumbered advancers by a ratio of about 3:1.
Citigroup (-4.9%) announced this morning that the company would record as much as $11 billion in write downs to cover more losses in mortgage-backed securites and collateralized debt (full story). CEO Chuck Prince resigned under the pressure, and the stock traded at a 52-week low. It will be difficult for the market to rally anytime soon with questions about how deep and severe the credit crisis really is. The only economic data of the day was the ISM's service sector index, which came in better than expected at 55.8 versus estimates of 54. The U.S. 10-Year lowered its yield to 4.29%.
The financial sector (-1.4%) weighed down the markets throughout the day, and utilities (+1.2%) was the only sector to finish up. Marvel (+16.2%) reported earnings better than expected and guided higher, while Burger King (-3.6%) was basically in-line with analysts' forecasts (full story). Dell (-0.3%) acquired storage-maker EqualLogic for $1.4 billion (full story). IAC (+7.5%) jumped off news that it would separate into five entities (full story). Crude fell $1.59 to $94.34/barrel.
There is no market moving economic data for Tuesday. Off the news today, the futures market puts odds of another 25 basis points decrease from the Fed at about 70%.
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Stocks to watch: C, DELL, MVL, BKC, IACI.