April 9 (Bloomberg) -- U.S. stocks fell for a second day, led by retailers and banks, after United Parcel Service Inc. said shipments are slowing and Wall Street firms reported increased holdings of securities that are the hardest to value.
UPS, the world's largest package-delivery company, tumbled the most since July 2006 after lowering its profit estimate. Goldman Sachs Group Inc., Morgan Stanley and Lehman Brothers Holdings Inc. retreated after reporting higher levels of so- called Level 3 assets. Boeing Co. posted its steepest gain since January, limiting the market's decline, after saying a third delay in the 787 Dreamliner won't hurt earnings this year.
The Standard & Poor's 500 Index fell 5.94 points, or 0.4 percent, to 1,359.6 at 10:43 a.m. in New York. The Dow Jones Industrial Average slipped 41.44, or 0.3 percent, to 12,535. The Nasdaq Composite Index decreased 15.57, or 0.7 percent, to 2,333.01. More than two stocks fell for every one that rose on the New York Stock Exchange.
UPS is a ``pretty good thermometer of the temperature of the economy,'' Gavin Graham, chief investment officer at Guardian Group of Funds Ltd. in Toronto, which manages about $5.4 billion, said in an interview with Bloomberg Radio. ``Unfortunately the temperature is dropping.''
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 lost $2.77, or 3.8 percent, to $70.54. 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 1.7 percent as a group, led by a 4 percent retreat in Amazon.com Inc., the largest Internet bookstore.
Goldman, the largest U.S. securities firm, fell $2.77 to $176.13. Morgan Stanley, the second-biggest, retreated 78 cents to $46.57. Lehman, the No. 4, decreased $1.57 to $42.10.
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 Gains
Boeing gained the most in the Dow average, rising $2.64, or 3.5 percent, to $77.66. The world's second-largest commercial aircraft maker said the change in its delivery schedule doesn't change its 2008 profit projections. The delay of the 787 Dreamliner 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 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.
Washington Mutual
Washington Mutual Inc. decreased 69 cents to $11.73. 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.
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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