Stocks Tumble On Waning Business Spending, Lower Bank Earnings Outlook

New York, NY (AHN) - A drop in durable goods orders and a bearish outlook for bank earnings for the first quarter ended the four-day advance of U.S. stocks on Wednesday.

The Commerce Department's announcement of factory orders declining 1.7 percent in February, an indicator of business spending, sent the Dow Jones Industrial Average falling 110 points and closing at 12,423. Financials led losers with shares of Citigroup Inc., J.P. Morgan Chase Co. and American Express Co. shedding 5.9, 4.2 and 4.5 percent, respectively.

Oppenheimer & Co. predicted Citigroup's quarterly loss to be four times bigger than previously forecast.

The Nasdaq Composite Index fell 17 points or 0.7 percent to 2,324 while the S&P 500 Index slid 12 points or 0.9 percent to 1,341.

Clear Channel Communications Inc. was the second biggest loser in the S & P 500 with shares falling 17 percent or $5.64 to $26.92 on news that its $19 billion buyout is in jeopardy.

A government report showing sales of new homes dropping 1.8 percent to a 13-year low in February sent shares of homebuilders Centex Corp. and D.R. Horton Inc. falling 5.9 percent.