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Stocks fell Monday on more worries about credit and subprime issues. The Dow Jones Industrial Average dropped 218.4 points (-1.7%), Standard & Poor's 500 index traded 25.5 points lower (-1.8%), and the Nasdaq decreased 43.9 points (-1.7%). Volume on the NYSE came in at 1.65 billion shares, and decliners beat advancers by a ratio of about 9:2.

Citigroup (-5.9%) got downgraded to a "sell" rating by Goldman Sachs (full story). The move was prompted by fears that Citigroup will report more massive writedowns and may have to resort to lowering its dividend or selling its stock and assets to stay financially afloat. European bank Swiss Re dropped more than 11% after it said it plans to writedown $1.1 billion from losses in subprime and CDOs (full story). Lowe's (-7.6%) third quarter results disappointed, and the company also lowered its outlook for the year and forecasted more troubles in 2008 (full story). Investors ran for safety, as the U.S. 10-Year jumped 24/32 in price, and now yields 4.07%.

Financials (-2.6%), basic materials (-4.3%), and energies (-2.4%) bled the most Monday. Crude gained $0.80 to finish at $94.64/barrel. Celgene (-1.4%) announced it will acquire Pharmion (+32.1%) for $2.9 billion (full story). Amazon (+0.74%) introduced a new e-book reader, called a "Kindle," which will allow users to download and carry up to 200 books in the device (full story). After the bell, PC maker Hewlett Packard (-2.5% during the day; +1.2% AH) beat estimates and offered an upbeat outlook (full story). Nordstrom (-6.1% during the day; +12.4% AH) reported a 22% rise in profits and beat analysts' forecasts late Monday as well (full story).

On Tuesday, Housing Starts (10:00 AM) and the State Street Investors Confidence Index (10:00 AM) will be reported. Perhaps the sellers will pause after the solid quarters from HP and Nordstrom.

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Source: Monday Wrap – Dow -1.66%, S&P -1.75%, Nas -1.66%