By Kristina Cooke
NEW YORK (Reuters) - The Dow and the S&P 500 fell to their lowest levels in three months on Monday after a broker downgrade of Citigroup sparked concerns more mortgage losses may lie ahead, compounding doubts about the outlook for the economy.
Goldman Sachs set the tone for the session when it recommended investors sell the shares of Citigroup saying the bank may have to write off $15 billion as mortgage losses reduce earnings.
The world's biggest reinsurer, Swiss Re, also fed worries that losses from the global credit crisis may widen, with its announcement of a $1.07 billion write-down.
"Everybody is expecting there will be more charges and write-offs," said Sam Rahman, portfolio manager at Baring Asset Management Inc in Boston.
"But the Goldman downgrade of Citigroup took the market by surprise," he said. "First, there is the magnitude of the write-offs they are predicting, plus it is unusual to see a 'sell' recommendation on such a large company."
The Dow Jones industrial average was down 218.35 points, or 1.66 percent, to end at 12,958.44. The Standard & Poor's 500 Index was down 25.47 points, or 1.75 percent, at 1,433.27. The Nasdaq Composite Index was down 43.86 points, or 1.66 percent, at 2,593.38.
Investors also had to contend with more disappointing news on the housing front. The Dow Jones U.S. Home Construction Index fell to its lowest level in 4 1/2 years, after an industry group said U.S. home builder sentiment stayed at a record low in November.
The National Association of Home Builders said potential buyers canceling orders or facing higher hurdles getting mortgages from lenders kept builders inundated with unsold houses. Continued...
La degradación de Citigroup llevó este lunes a la mayor caída en tres meses del Dow Jones y del S&P 500, echando leña a los miedos por más pérdidas relacionadas a la crisis hipotecaria.

Goldman Sachs instó a los inversores a vender las acciones de Citigroup, declarando que el banco podría realizar rebajas de $15 mil millones y con serias reducciones de ganancias. Además, la aseguradora más grande del mundo, Swiss Re, también alimentó los miedos y anunció que podría realizar rebajas de $1,07 mil millones.

En total, el Dow Jones Industrial Average se hundió en 216,88 puntos, o 1,65%, para cerrar por debajo en 12.959,91. El Standard and Poor's 500 Index se sumergió en más de 25,47 puntos o 1,75% para finalmente caer hasta los 1433,27. El Nasdaq Composite Index sufrió pérdidas de 1,66% para terminar en 2.593,38, 43,86 puntos debajo de su último registro.

Las acciones de Citigroup declinaron en 5,9% a $32, mientras que las del Bank of America, el segundo banco más importante, se deslizaron en 3,5% $42,82. El S&P Financial Index finalmente registró bajas de 3% al paso de que la crisis hipotecaria no deja descansar a Wall Street.