Stocks closed lower Monday, after banking giant Citigroup said it expects mortgage defaults to worsen as the year draws to a close.
Citigroup posted a 57 percent plunge in third-quarter profits, pegged in part to its mortgage lending business.
Major banks, in conjunction with the Treasury Department, agreed to combine resources to form a buying pool to support the struggling market for commercial paper, short-term debt securities issued by companies to support current operations.
Oil prices hit a record high in futures trading, with the November contract climbing $2.44 a barrel, to $86.13.
The Dow Jones industrial average fell 108.28 points, to 13,984.80. All of the major industry sectors in the Standard & Poor’s 500 index lost ground, except the energy sector.
The broader S&P 500 lost 13.09, to 1548.71, led by a decline in Citigroup shares. The financial-services sector was the worst-performing group of stocks. And the Nasdaq composite index closed down 25.63, to 2780.05, as nervous investors continued to back away from highflying Google shares.
Tech-stock stalwarts Intel and Yahoo are scheduled to report quarterly results Tuesday.
The Russell 2000 index of small-company stocks lost 11.81, to 829.36.
Losers outnumbered winners by an 8-3 ratio among NYSE-listed stocks and by a 7-3 ratio among Nasdaq stocks. NYSE volume reached 1.29 billion shares; Nasdaq volume totaled 2 billion shares.
Among stocks in the news, Chicago-based Boeing dropped $1.86, to $94.83, after broker Sanford C. Bernstein removed its “outperform” rating. Medical device-maker Medtronic lost $6.33, to $50. The company canceled sales of a product used in devices to treat faulty heart rhythms.
Treasury securities advanced in the face of the stock market decline and renewed worries about credit markets.
TREASURY AUCTIONS: Interest rates rose at the weekly auctions of 3- and 6-month Treasury bills. The discount rate for 3-month bills was 4.18 percent, up from 3.92 percent at last week’s auction. The rate for 6-month bills was 4.22 percent, up from 4.09 percent.
The coupon-equivalent investment rates at Monday’s auctions were 4.3 percent for 3-month bills and 4.39 percent for 6-month bills.