U.S. stocks fell the most in two weeks after United Parcel Service Inc. said shipments are slowing, Wall Street firms reported owning more securities that may be vulnerable to writedowns and oil climbed to a record.
UPS, the world's largest package-delivery company, tumbled the most since November after reducing its profit estimate. Goldman Sachs Group Inc., Morgan Stanley and Lehman Brothers Holdings Inc. led financial shares to their lowest level of the month after reporting more so-called Level 3 assets, the hardest securities to value. Amazon.com Inc., the largest Internet retailer, and Google Inc., the most popular search engine, retreated after analysts said the companies' profits are at risk from an economic slowdown.
The Standard & Poor's 500 Index fell 10.88 points, or 0.8 percent, to 1,354.66 at 1:23 p.m. in New York. The Dow Jones Industrial Average lost 75.23, or 0.6 percent, to 12,501.21. The Nasdaq Composite Index decreased 24.51, or 1 percent, to 2,324.25. Almost four stocks fell for every one that rose on the New York Stock Exchange.
``The UPS misses have upset people because they're seen as such a barometer for the economy,'' said Frank Ingarra, an assistant portfolio manager at Hennessy Advisors Inc., which oversees $1.1 billion in Novato, California. ``Now there are even more of these hard-to-value assets that people have to get off their balance sheets. If you can't trade them or give them to someone else, then at some level they'll have to be written down and I think that's bugging people.''
Analysts have cut their projections for first-quarter earnings every week this year as evidence grows that more than $230 billion in global losses and asset writedowns at banks have pushed the economy into a recession. First-quarter profits at S&P 500 companies probably fell an average of 11.3 percent from a year earlier, according to estimates compiled by Bloomberg.
Recession Concern
The U.S. expansion will come to a halt in the first six months of 2008 as consumer spending cools, a Bloomberg News survey of economists showed. The world's largest economy will not grow at all from January through June, according to the median estimate of 62 economists surveyed from April 2 to April 8. A majority now projects the U.S. is, or will soon be, in a recession.
UPS slumped $2.39, or 3.3 percent, to $70.92. Earnings were 86 cents to 87 cents a share, down from a prior projection of 94 cents to 98 cents, UPS said. The average estimate of analysts surveyed by Bloomberg was 94 cents. The company is scheduled to report results on April 23.
Retailers fell 2.6 percent as a group, led by a 4.2 percent retreat in Amazon.com Inc. Google lost $8.03 to $459.78, leading the S&P 500 Information Technology Index to a 0.6 percent drop.
`Somewhat Cautious'
Lehman Brothers Holdings Inc. analyst Douglas Anmuth said he is ``somewhat cautious'' on Internet firms given the ``apparent deceleration'' of the economy in the first two months of the quarter. The analyst said Amazon and Google are probably at greater risk than other top online companies.
Oil's advance to an all-time high of $112 a barrel also weighed on retailers.
Goldman, the largest U.S. securities firm, fell $4.18 to $174.72. Morgan Stanley, the second-biggest, retreated $1.21 to $46.14. Lehman, the No. 4, decreased $1.81 to $41.86.
Level 3 assets increased 39 percent at Goldman, 6.1 percent at Morgan Stanley and 1.3 percent at Lehman, according to filings with the Securities and Exchange Commission. More assets have become difficult to value in the last three months as investors shunned a wider array of credit, freezing the trading of securities.
Boeing Rallies
Boeing Co. gained the most in the Dow average, rising $4.44, or 5.9 percent, to $79.46. The world's second-largest commercial aircraft maker said the change in its delivery schedule for the 787 Dreamliner doesn't change its 2008 profit projections. The delay until the third quarter of 2009 matched the forecast of 10 analysts in a Bloomberg News survey.
Financial stocks gained earlier after a person briefed on the matter said Citigroup Inc. is in talks to sell $12 billion of loans at a loss to Apollo Management LP, Blackstone Group LP and TPG Inc. as part of an effort to shrink the bank's balance sheet. A sale to the private equity firms would shield the bank from further declines in the value of the debt, said the person, who wouldn't be identified because negotiations are private.
Citigroup added 10 cents to $23.86.
Washington Mutual
Washington Mutual Inc. decreased 42 cents to $11.39. The largest U.S. savings and loan rejected an offer from JPMorgan Chase & Co. to buy it for as much as $8 a share, or $7 billion, before announcing it received a $7 billion capital infusion from a group led by TPG Inc., the Wall Street Journal said, citing people familiar with the situation.
E-mails sent by Bloomberg News to Washington Mutual spokesman Derek Aney and JPMorgan spokesman Brian Marchiony seeking confirmation weren't immediately returned.
MGIC Investment Corp., PMI Group Inc. and Radian Group Inc., the three largest U.S. mortgage insurers, dropped after S&P cut their credit ratings and said they may lose money through next year.
MGIC retreated 42 cents to $11.07. PMI declined 82 cents to $5.35. Radian fell 58 cents to $5.30. MBIA Inc., the bond insurer that has posted record losses because of guarantees on mortgage- related securities, slipped 96 cents, or 7.4 percent, to $12.03 for the steepest drop in the S&P 500.
Inventories at U.S. wholesalers rose more than forecast in February, reflecting the biggest slump in sales in more than a year. The 1.1 percent gain followed a revised 1.3 percent increase in January that was larger than previously reported, the Commerce Department said.
U.S. stocks yesterday dropped the most in seven days after the first signs of quarterly earnings disappointed investors, Washington Mutual Inc. slashed its dividend and some Federal Reserve officials warned of a prolonged recession.
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