U.S. Stocks Fall, Wiping Out 2007 Gain for S&P 500; Exxon Drops

Nov. 21 -- U.S. stocks fell, wiping out the year's gain for the Standard & Poor's 500 Index, after concern that losses from mortgage defaults will spread through the economy pushed down shares of banks and commodities producers.

American Express Co. tumbled to the lowest in 14 months after Morgan Stanley recommended investors sell shares of the third-largest credit-card network because a slowing economy may hurt earnings. Exxon Mobil Corp., the biggest U.S. oil company, dropped after oil retreated. Circuit City Stores Inc., the second-largest consumer-electronics chain, declined to a four- year low after JPMorgan said it may not find a buyer to turn around its business until next year.

The S&P 500 lost 22.93, or 1.6 percent, to 1,416.77, leaving it with a 0.1 percent loss on the year. The Dow Jones Industrial Average declined 211.1, or 1.6 percent, to 12,799.04 as 29 of its 30 members retreated. The Nasdaq Composite Index dropped 34.66, or 1.3 percent, to 2,562.15. Almost four stocks fell for every one that rose on the New York Stock Exchange.

``It's a very panicky market,'' said John Kattar, who oversees $2 billion as chief investment officer at Eastern Investment Advisors in Boston. ``There's a growing feeling that the problems are unknowable and unquantifiable, and that there's no way of dealing with it except through the passage of time.''

Ten-year Treasury yields fell below 4 percent for the first time in more than two years as investors sought the safety of U.S. government debt. Benchmark stock indexes also declined in Asia and Europe.

`Sharply Deteriorating'

American Express dropped $2.66, or 4.7 percent, to $54.34. ``Sharply deteriorating'' consumer credit quality may prove a bigger issue for the company than other card issuers because its lending portfolio has grown ``far and away faster than its peers,'' analysts Kenneth Posner and Charles Murphy wrote in a note to investors.

Exxon Mobil retreated 78 cents to $87.04. Crude oil fell from a record after an Energy Department report showed that inventories at the delivery point for the U.S. benchmark grade increased. Crude oil for January delivery lost 74 cents to $97.29 a barrel. Futures climbed to $99.29 earlier, the highest intraday price since trading began in 1983.

Circuit City, Office Depot

Circuit City shares plunged 32 cents, or 5.6 percent, to $5.45. A ``turnaround likely requires deep pockets -- such as the involvement of a strategic partner (or acquirer),'' wrote JPMorgan analyst Stephen Chick, who cut the stock to ``neutral.'' ``Such a scenario may wait itself out until after the second half'' of 2008.