U.S. Stocks Fall, Led by Materials Producers

-- U.S. stocks fell for the first time in six days, led by miners, steelmakers and manufacturers, on concern that the housing slump will hinder economic growth.

Nucor Corp., Freeport-McMoRan Copper & Gold Inc. and Newmont Mining Corp. each posted its steepest retreat in a week. Home Depot Inc. dropped the most since Aug. 14 after a Financial Times report said the sale of its wholesale supply unit may not be completed by tonight's deadline.

``We're certainly not out of the woods,'' said Andy Brooks, head equity trader at T. Rowe Price in Baltimore, which has $380 billion in assets. ``There are a lot of people who are still hoping this market goes down.''

The Standard & Poor's 500 Index lost 8.91, or 0.6 percent, to 1,455.16 at 1:32 p.m. in New York. The Dow Jones Industrial Average decreased 60.89, or 0.5 percent, to 13,175.24. The Nasdaq Composite Index slipped 20.43, or 0.8 percent, to 2,532.37.

Stocks erased earlier gains after Countrywide Financial Corp. Chief Executive Angelo Mozilo said in a CNBC interview that recent turmoil in credit markets was ``one of the greatest panics'' he's seen and the housing slump may lead the country to a recession.

He spoke following Countrywide's announcement that Bank of America Corp. bought $2 billion of preferred stock in the nation's largest mortgage lender.

The S&P 500 Materials Index fell 1.2 percent for its biggest drop in a week. Nucor, the second-largest U.S. steelmaker, decreased $2.45 to $51.11. Freeport-McMoRan, the second-biggest copper producer, retreated $2.09 to $83.50. Newmont, the world's second-largest gold miner, lost 53 cents to $40.23.

Home Depot

Home Depot declined 84 cents to $33.93. The sale of the supply unit is in doubt over whether three investment banks are willing to fund the deal, the Financial Times reported, citing people familiar with the talks. Home Depot spokeswoman Paula Drake had no comment.

Countrywide gained 60 cents, or 2.8 percent, to $22.42 after Bank of America, the second-biggest U.S. bank, bought shares that yield 7.25 percent and can be converted into common stock at a price of $18.

Railroad shares dropped after the Association of American Railroads said freight traffic last week fell 0.3 percent from the previous year.

CSX Corp., the third-largest U.S. railroad, retreated $1.51, or 3.5 percent, to $42.31. Union Pacific Corp., the biggest, lost $2.82 to $110.05.

Banks Downgraded

Associated Banc-Corp., Cathay General Bancorp and City National Corp. fell after Merrill Lynch & Co. analysts recommended investors sell the shares on prospects of weaker earnings growth.

``Recent credit market disruptions have resulted in deeper pessimism regarding mid- and small-cap bank valuations and earnings power,'' analysts Heather Wolf and Erika Penala wrote in a note to investors.

Associated fell 75 cents to $27.98, Cathay dropped $1.49 to $33.72 and City National Corp. slipped $1.29 to $73.03.

Financial shares in the S&P 500 decreased 0.9 percent as a group.

Perrigo Co. fell $1.36, or 6.2 percent, to $20.66, the biggest drop in almost three years. The largest U.S. maker of non-prescription, store-branded drugs reported profit and revenue that missed analysts' estimates. Adjusted earnings for the fiscal fourth quarter were 24 cents a share, missing the 25- cent average estimate of three analysts in a Bloomberg survey.

Akamai Technologies

Akamai Technologies Inc. fell 83 cents, or 2.6 percent, to $31.06. Competitor Limelight Networks Inc., which helps businesses speed up delivery of Web videos, announced that it has entered into an Internet technology and services agreement with Microsoft Corp. for a next-generation network. Limelight surged 95 cents, or 11 percent, to $9.43.

Limited Brands Inc. added $1.14 to $23.39 for the top gain in the S&P 500. The owner of Victoria's Secret reported second- quarter profit more than doubled because of a gain from selling its Express clothing chain and said it was ``comfortable'' with some analysts' estimates for future earnings.

About five stocks fell for every two that gained on the New York Stock Exchange. Some 791 million shares changed hands on the Big Board, 16 percent less than the same time a week ago.

European stocks climbed for a fifth day and Asian markets gained for a fourth. The Dow Jones Stoxx 600 Index added 0.3 percent, giving the gauge its longest winning streak in more than three months. The Morgan Stanley Capital International Asia-Pacific Index added 2.2 percent.

U.S. Treasuries were little changed, erasing earlier declines, as a Federal Reserve report showed the amount of commercial paper outstanding fell the most in the past week since 2000.