U.S. Stocks Fall on Growing Concern Over Citigroup (Correct)

(Corrects Citigroup’s rank by assets in 1st paragraph.)

Nov. 21 (Bloomberg) — Most U.S. stocks slid for a third day after Citigroup Inc. Chief Executive Officer Vikram Pandit said he won’t split up the company, spurring concern over the survival of the nation’s second biggest bank by assets.

Citigroup tumbled 19 percent to an almost 16-year low after people who listened to a conference call with employees said Pandit has no plans to sell off the company’s Smith Barney brokerage unit or disassemble the company. JPMorgan Chase & Co., the largest U.S. bank by market value, sank 11 percent to $20.86 as the Standard & Poor’s 500 Financials Index dropped to the lowest level since 1995.

Four stocks declined for every three that rose on the New York Stock Exchange. The S&P 500 slipped 0.1 percent to 751.54 at 10:57 a.m. in New York, extending losses in its second-worst week since World War II. The Dow Jones Industrial Average slipped 24.46 points, or 0.3 percent, to 7,527.83, while the Nasdaq Composite Index lost 0.3 percent to 1,311.65.

The S&P 500 extended its 2008 tumble to 49 percent yesterday and was poised for the worst annual decline in its 80- year history after economic reports depicted a deepening recession and lawmakers postponed a vote on a plan to salvage the auto industry. Citigroup, which has about $2 trillion of assets, fell 26 percent to a 15-year low as concern deepened more companies and consumers will default as the economy worsens.

This year’s tumble in the S&P 500 dragged down 97 percent of its stocks and all 64 of its so-called level-three industries, groups such as “distributors” and “leisure equipment,” as of yesterday’s close. More stocks decreased in the current bear market than in the 49 percent rout after the technology bubble burst in 2000.

‘Irrational Exuberance’

The benchmark index for U.S. equities yesterday dropped to within 10 points of its level on Dec. 5, 1996, the day then- Federal Reserve Chairman Alan Greenspan questioned in a speech whether the U.S. stock market suffered from “irrational exuberance.” The S&P 500 was trading for 20.7 times earnings then and went as high as 62.9 in March 2002; it was valued at 16.3 times profits at yesterday’s closing level, the cheapest since 1995.

The S&P 500 has sank 12 percent this week, poised for its third straight weekly decline. The Dow average has declined 10 percent, while the Nasdaq Composite Index is down 11.8 percent.

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