16:30 ET
S&P 500 Testing 700
Dow -299.64 at 6763.29, Nasdaq -54.99 at 1322.85, S&P -34.27 at 700.82
[BRIEFING.COM] Stocks fell for the fourth straight session as a sweeping selling effort took the S&P 500 down to levels not seen since October 1996.
The downward move slowed late in the session as the S&P 500 approached the 700 level. Though unable to forcefully break below that key level, the stock market still finished just above 700, which will likely represent a closely watched level again tomorrow.
AIG (AIG 0.42, +0.00) fed fears about the health of the financial system by posting a fourth quarter loss exceeding $60 billion, which is being reported as the largest quarterly loss in U.S. corporate history. To help prop up AIG, the government will give the insurance giant an additional $30 billion.
European financial giant HSBC (HBC 28.25, -6.55) will issue a discounted rights offering to existing shareholders, pare its U.S. consumer operation, cut jobs, and reduce its dividend. HSBC also reported lower profits.
The announcements came after Citigroup (C 1.20, -0.30) announced late last week that it has reached a deal in which the government will end up with a 36% stake in the company.
Financial stocks finished the session with a 6.8% loss, which was in-line with declines seen in the materials (-6.9%), industrials (-6.7%), and energy (-6.4%) sectors.
With 98% of the companies in the S&P 500 posting a loss, investors pursued the relative safety of Treasuries. The benchmark 10-year Note climbed roughly 38 ticks this session. That lowered its yield to roughly 2.89%.
Though also considered a safe-haven, gold prices fell 0.3% from the prior session's closing price, finishing at $940.00 per ounce.
In other commodities trading, crude oil contracts closed pit trading at $40.15 per barrel, down 11.6% from Friday's close.
Economic data continues to do little to lift investor sentiment, though January personal income and spending were better than expected. Personal income for January was up 0.4% after declining 0.2% the prior month. Economists were calling for a 0.2% decline in January. The core personal consumption expenditures (PCE) price index for January increased 0.1% month-over-month, in-line with expectations. The prior reading was flat.
The February ISM Manufacturing Index inched up to 35.8 from 35.6 in January. Economists expected a reading of 33.8 for February. Since the reading remains below 50, the slight month-to-month improvement merely indicates the rate of contraction has slowed.
The reports were largely dismissed as famed value investor Warren Buffett stated he believes the economy is in shambles, and that it will likely remain that way beyond 2009.
January pending home sales are due tomorrow morning (10:00 AM ET). Meanwhile, Fed Chairman Bernanke testifies on the U.S. economy and budget before the Senate Budget Committee tomorrow (10:00 AM ET). Treasury Secretary Geithner will testify to the House Ways and Means Committee on the federal budget later in the day (12:30 PM ET).
..Nasdaq 100 -3.6%. ..S&P Midcap 400 -6.1%. ..Russell 2000 -5.5%.
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