New York - US stock markets slid on Monday led by financial shares on investor concerns that losses tied to risky home mortgage loans will continue after Citigroup said its revenues could decline further by up to 11 billion dollars. Shares of Citigroup Inc, the largest US bank, fell 1.83 dollars, or 4.9 per cent, after the resignation of chief executive Charles Prince a day earlier and the massive writedowns.
The company said revenues would decline 8 billion to 11 billion dollars on losses related to subprime mortgages to borrowers with poor credit. The decline will cost the company up to 7 billion dollars in net income in the fourth quarter, it said in a statement.
The announcements also led Fitch Ratings and Moody's Investors Service to lower Citigroup's credit rating and Standard & Poor's indicated it might follow suit, Bloomberg financial news reported.
"There was a hope in the market that the third-quarter earnings numbers that came out from the financial sector were going to be the beginning and the end of the summer financial crisis," Alan Gayle, of Trusco Capital Management in Richmond, Virginia, told Bloomberg. "We are finding that's not the case."
Morgan Stanley, Merrill Lynch & Co. and Goldman Sachs Group Inc also fell as investors worried additional losses tied to the subprime mortgages could hit those firms.
The blue-chip Dow Jones Industrial Average slid 51.70 points, or 0.4 per cent, to 13,543.40. The broader Standard & Poor's 500 fell 7.48, or 0.5 per cent, to 1,502.17, and the technology-heavy Nasdaq Composite Index lost 15.20, or 0.5 per cent, to 2,795.18.
The US dollar rose to 69.07 euro cents from 68.94 in New York on Friday. The dollar dipped to 114.48 Japanese yen from 114.85.
Gold rose 2.30 dollars to 810.80 per fine ounce.
