Stocks tumbled Monday as Goldman Sachs' pessimistic outlook on the financial sector and a weak report on U.S. homebuilder confidence sparked a broad sell-off. Investment bank Goldman Sachs downgraded Citigroup shares to “sell” from “neutral” on Monday and said the bank will likely need to take $15 billion in writedowns over the next two quarters due to bets on risky debt. Goldman Sachs also reduced its price target on shares of Merrill Lynch, Morgan Stanley, and others in the financial sector. The comments sent the overall market lower as investors were reminded that the extent of the credit-market turmoil is unknown and could be much worse than has been expected. Such worries were compounded by bets that consumer spending will be lackluster as Wall Street heads into the important holiday retail sales period. Weak result and a disappointing forecast from home-improvement retailer Lowe's added to concerns about consumers' ability to keep spending. Also weighing on investor sentiment was more problems for the weak U.S. dollar, and in the afternoon, an industry report showed that U.S. homebuilder confidence remained at record low levels in November. Light sweet crude oil for January delivery rose 80 cents to $94.64 a barrel on the New York Mercantile Exchange. The Dow Jones industrial average fell 218.35, or 1.7 percent, to 12,958.44. All but three of the index's 30 components fell. In addition to Citigroup-whose shares fell 5.2 percent-and other financial stocks, big decliners included General Motors, Alcoa, Walt Disney, and AT&T. The broader Standard & Poor's 500 index fell 25.47, or 1.75 percent, to 1,433.27. The technology-heavy Nasdaq composite index fell 43.86, or 1.7 percent, to 2,593.38. The New York Stock Exchange composite index fell 204.05 to 9,497.33. The American Stock Exchange composite index fell 63.22 to 2,342.19. And the Russell 2000 index fell 19.15 to 750.35.
