NEW YORK (MarketWatch) -- U.S. stocks accelerated their losses Monday afternoon, pushing the Dow industrials below the 13,000 level, after Goldman Sachs downgraded Citigroup Inc., saying it envisions more credit-related hits at the banking powerhouse.
"News that Goldman Sachs downgraded Citigroup to sell heightened jitters in stocks, while forecasts of a weak holiday shopping season added to market fears of a U.S. recession down the road," said analysts at Action Economics.
The Dow Jones Industrial Average
$INDU 12,958.44, -218.35, -1.7%) fell 214.9 points, or 1.6%, to 12,961.9, with 25 of its 30 components trading lower.
Citigroup
C 32.00, -2.00, -5.9%) fronted the Dow's decline, its stock off 5.5%.
The bank was downgraded to sell from neutral by Goldman Sachs, with the broker seeing up to $15 billion in write-downs from collateralized debt obligations during the next two quarters. The Ratings Game.
The downgrade was one of multiple developments related to the ongoing credit crunch. Read Subprime Today.
The slide in equities deepened after the National Association of Home Builders reported its housing market index held steady at a record-low 19 in November, with the October index revised up slightly to 19 from an initial estimate of 18.
On the New York Mercantile Exchange, crude-oil futures fell, with the contract for January delivery up 17 cents to $94.01 a barrel. See full story.
At a rare summit, the Organization of Petroleum Exporting Countries said it would not change output. Read more.
Treasurys posted mild gains Read Bond Report, while the dollar was slightly higher against most major counterparts, but fell modestly against the yen. See Currencies.
Gold futures fell sharply after losing more than $47 the prior week, with the contract for December delivery off $8.5 at $778.5. Read me<x>tals Stocks.
Read about Turkey's role in the gold markets in Special Emerging Markets Report.
Volume on the New York Stock Exchange came to 863 million, and declining stocks topped those advancing 7 to 1. On the Nasdaq, nearly 1.2 billion shares were traded, and declining stocks outpaced advancers more than 4 to 1.
Credit loses
Reinsurance company Swiss Re on Monday reported $1.1 billion in subprime-related losses. See full story.
Stricken mortgage bank Northern Rock PLC on Monday warned that takeover proposals received so far are "materially below" its closing price on Friday.
