U.S. stocks slide as Citi-inspired credit jitters surface

NEW YORK (MarketWatch) -- Wall Street stocks lost ground Monday after Citigroup Inc. amplified worries about the extent of the credit crisis by saying it might have to write off $11 billion more in losses.

"What were once just concerns about credit have graduated to a full-blown panic," said Kevin Giddis, managing director, fixed income, Morgan Keegan & Co. Down more than 100 points early on, the Dow Jones Industrial Average ($INDU) recently was down 38.4 points at 13,556.7, with 19 of its 30 components lower.
Citigroup (C) led the Dow's declines, its stock slumping 4.5%, after it stirred investor discontent with its announcement that Charles Prince would step down as chairman and chief executive of the largest U.S. bank, which is also looking at writing off up to $11 billion more of the $55 billion in subprime-related securities it holds. .
Stocks pared their losses some after the Institute for Supply Management reported nonmanufacturing sectors of the U.S. economy in October grew more than economists expected, with the ISM index rising to 55.8% from 54.8% in September.
The ISM data was "a little bit better than estimates and helps a little bit," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank. "Industrials bounced the most, and some of the rails are up," said Fitzpatrick, pointing to United Technologies Corp. (UTX) , which was recently up 0.8%.
The S&P 500 ($SPX) fell 4.52 points to 1,505.13, while the Nasdaq Composite shed 6.38 points to 2,804.00. Volume on the New York Stock Exchange came to 448 million, and declining stocks outran advancing issues about 3 to 1. On the Nasdaq, 646 million shares exchanged hands, and decliners topped advancers nearly 2 to 1.

Financials fallout
In the wake of Citigroup's disclosures and top-management shakeup, the shares of rivals Merrill Lynch & Co. (MER) , Bear Stearns Cos. (BSC) , Credit Suisse Group (CS) and Barclays (BCS) were all the subject of brokerage downgrades.
Other developments on the corporate front included Dell Inc.'s disclosure that the computer manufacturer (DELL) had inked an agreement to acquire storage supplier EqualLogic for about $1.4 billion in cash. Ford Motor Co. (F) and the United Auto Workers reached a tentative contract agreement, including a memorandum of understanding to set up an independent health-care trust for retired workers.
And shares of PetroChina Co. (PTR) more than doubled in their Shanghai debut, giving the oil giant a $1 trillion market capitalization and easily passing Exxon Mobil Corp. (XOM) as the world's largest company.
In commodities trading on the New York Mercantile Exchange, crude-oil futures fell $1.02 to stand $94.92 a barrel, while gold futures shed 50 cents to $808 an ounce. Treasurys were mixed, with the benchmark 10-year note off 1/32 to 103 10/32, its yield ($TNX) at 4.329%.
European shares traded in the red with credit-market jitters back in the news as a private-equity fund withdrew its offer to buy the U.K. supermarket chain J Sainsbury. And overnight, Hong Kong stocks skidded after comments by China's premier raised concerns that a plan to let Chinese investors buy Hong Kong stocks could face delays.