u.s market decline

U.S. Stocks Decline, Led by Financials; Citigroup, Merrill Fall
By Michael Patterson

Nov. 5 (Bloomberg) -- U.S. stocks fell to the lowest in two weeks after Citigroup Inc. said it may write down an additional $11 billion, heightening concern that financial companies will report more losses tied to subprime home loans.
Citigroup, the largest U.S. bank by assets, retreated for the fifth straight day after it said Chief Executive Charles O. ``Chuck'' Prince stepped down. Merrill Lynch & Co., Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. also dropped.
The Standard & Poor's 500 Index slid 7.72, or 0.5 percent, to 1,501.93 at 10:11 a.m. in New York. The Dow Jones Industrial Average lost 73.65, or 0.5 percent, to 13,521.45. The Nasdaq Composite Index decreased 17.24, or 0.6 percent, to 2,793.14. About nine stocks dropped for every two that rose. Financial firms also led benchmark indexes lower in Europe and Asia.
``These credit concerns will continue to hit certainly the financial area, the homebuilding area and more broadly the consumer,'' said Robert Doll, who helps manage about $1.3 trillion as chief investment officer of global equities at BlackRock Inc. in Princeton, New Jersey. ``Our guess is that it does slow the U.S. economy and the global economy to some degree.''
Benchmark indexes pared some of their losses after a gauge of service industries unexpectedly grew at a faster pace in October.
Banks, securities firms and other financial companies in the S&P 500 have tumbled 16 percent as a group this year amid speculation that more losses lie ahead for their holdings of securities backed by mortgages and corporate loans.
Companies in the S&P 500 Financials Index that released third-quarter results so far reported an average profit decline of 22 percent, the worst quarter since Bloomberg began tracking the data in 1997. Analysts expect earnings to drop 4 percent this quarter, according to estimates compiled by Bloomberg.
Global Drop
Global stocks also fell today on concern takeovers may dry up after Qatar dropped its 10.5 billion-pound ($21.9 billion) bid for U.K. supermarket chain J Sainsbury Plc because of turmoil in the credit markets. Traders also sold shares and bought U.S. government debt after Pakistan's president imposed emergency rule and suspended the country's constitution.
Citigroup retreated $1.81, or 4.8 percent, to $35.92. Prince stepped down after credit-market losses contributed to a 32 percent decline in Citigroup's shares this year. The company had its credit rating cut by Fitch Ratings and placed on review for possible downgrade by S&P. Citigroup also reduced its third- quarter earnings per share by 3 cents after correcting the value of some securities backed by pools of bonds.
Merrill, Goldman
Merrill, the world's biggest brokerage, lost $2.92 to $54.36. Lehman analysts cut their recommendation on the shares to ``equal weight'' from ``overweight'' and lowered their price estimate to $58 from $79.
Goldman, the biggest securities firm by market value, dropped $10.49 to $219.11. Lehman, the largest U.S. underwriter of mortgage bonds, declined $3.10 to $57.02.
``There's a bit more uncertainty out there and it's bringing down the financial sector,'' said Giri Cherukuri, who helps oversee $1.2 billion as a portfolio manager at Oakbrook Investments LLC in Lisle, Illinois. ``There's more bad news to come.''
Europe's Dow Jones Stoxx 600 Index fell 1 percent and the Morgan Stanley Capital International Asia Pacific Index lost 1.9 percent. Societe Generale, the second-biggest French bank by market value, tumbled 2.6 percent to 105.83 euros. Mitsubishi UFJ, Japan's largest publicly traded lender, lost 3.3 percent to 1,017 yen.
J Sainsbury sank 113.5 pence to 441.5 pence. Qatar's Delta (Two) Ltd. dropped its takeover plans after ``deterioration'' in the credit markets and demands by the supermarket chain's pension fund made the deal too expensive.
Bond Rally
U.S. Treasuries rose, driving yields on two-year notes to the lowest since 2005, as investors sought a haven in government debt. The yen climbed against the 16 most-traded currencies as traders pared investments bought with money borrowed in Japan.
Pervez Musharraf, the president of Pakistan, suspended the constitution on Nov. 3 for the second time since he took power in a 1999 military coup, saying judicial interference in government affairs had helped terrorism and extremism peak throughout the country. Pakistan's stocks fell the most since June 2006.
WellCare Health Plans Inc. advanced $9.93 to $37.30. The U.S. health insurer that lost most of its market value after fraud investigators raided its offices said profit rose 67 percent in the third quarter on gains in government revenue.
The Institute for Supply Management's index of non- manufacturing businesses, which make up almost 90 percent of the economy, rose to 55.8 from 54.8 the previous month. Anything greater than 50 indicates growth. Economists in a Bloomberg survey had forecast a drop to 54.