* Citigroup mulls Smith Barney sale
* Chevron's outlook adds to earnings worry
* December jobs data shows labor market deteriorating
* Dow off 1.6 pct; S&P 500 and Nasdaq shed over 2 pct
* For up-to-the-minute market news, click []
(Adds context to Dow)
By Chuck Mikolajczak
NEW YORK, Jan 9 (Reuters) - U.S. stocks fell on Friday
after government data showed the labor market deteriorated
further in December, raising investor concerns about the
outlook for profits, spending and a deepening recession.
Shares of Citigroup Inc <C.N> fell 5.7 percent after the
Wall Street Journal said the bank may sell its Smith Barney
brokerage, with Morgan Stanley <MS.N> a possible suitor,
prompting question about why it would want to sell one of its
relatively healthier businesses.
Payrolls were cut slightly less than expected, but the U.S.
jobless rate climbed to its highest in nearly 16 years and the
number of jobs lost in October and November was increased,
pressuring already weak consumer spending.
Energy shares fell after Chevron Corp <CVX.N> joined a
growing list of bellwether companies warning about profits. It
slid 1.9 percent, making it one of the top drags on the Dow.
Technology shares also took a beating, causing the Nasdaq
to briefly wipe out its 2009 gains, led by shares of Apple Inc
<AAPL.O>, off 2.3 percent. Microsoft MSFT.O slid 3 percent.
Rambus <RMBS.O> shares fell as much as 40 percent, its
biggest slide since becoming a public company in 1997, after a
judge ruled on Friday against the company in a patent case with
rival memory chip maker Micron Technologies <MU.N>.
"There is still a lot of bad news in housing and
employment. While the credit situation is beginning to thaw,
we're still a sick patient." said Kevin Kruszenski, Head of
Listed Trading at KeyBanc Capital Markets in Cleveland.
"People are getting skittish in front of earnings season."
The Dow Jones industrial average <> ended down 143.28
points, or 1.64 percent, to 8,599.18. The Standard & Poor's 500
Index <.SPX> slid 19.38 points, or 2.13 percent, to 890.35. The
Nasdaq Composite Index <> fell 45.42 points, or 2.81
percent, to 1,571.59.
Thus far in 2009, the Dow is off 2 percent, while the S&P
500 is down about 1.4 percent.
The sell-off caused the benchmark S&P 500 to mark its worst
week since its Nov. 21 intraday bear market low, trimming its
advance since then to about 18 percent.
U.S. employers slashed 524,000 jobs from payrolls in
December, less than the 550,000 seen in a Reuters poll, but
still bringing total job losses for 2008 to 2.6 million, the
most since 1945. For more see [].
Underscoring weakness in the labor market, Boeing <BA.N>
said it would cut 4,500 workers or about 7 percent of the
workforce in its commercial airplane unit. [].
Shares slipped 0.8 percent to $44.45.
In warning about its outlook, Chevron, the second-largest
U.S. oil and gas company, cited the impact of lower energy
prices on exploration and production business. [].
Chevron shares fell to $72.82, while those of rival Exxon
Mobil Corp <XOM.N> declined 1.9 percent to $77.57. On Nasdaq,
shares of Apple, maker of the iPhone, dropped 2.3 percent to
$90.58. The semiconductor index <.SOXX> was off 3.3 percent.
U.S. President-elect Barack Obama cited the faltering jobs
market as a reason for his push for a new stimulus plan, set to
include tax cuts and major public works spending that could
total nearly $800 billion. [].
Share of Rambus tumbled after a U.S. District Court ruled
it had destroyed documents and so may not enforce patents
against Micron Tech. []
Shares of the chip interface maker dropped 39.2 percent to
$11.24 while Micron slid 3.5 percent to $3.29.
Shortly before reports of the possible Smith Barney sale,
Citigroup <C.N> said former U.S. Treasury secretary Robert
Rubin resigned as senior counselor following months of
criticism of his performance. []
Citigroup fell 5.7 percent to $6.75 while Morgan Stanley
rose over 1.3 percent to $19.06.
Another standout was a plunge in shares of Lennar Corp
<LEN.N>, the second-largest U.S. home builder, after a letter
questioning a late 1990s transaction involving the company
surfaced on the Internet.
The letter to the FBI and other authorities from California
pastor Barry Minkow, who served time in jail for stock fraud,
concerned a joint venture between Lennar and a private
developer to build a high-end housing project and golf course
in California. [] The company said Minkow had
acted as an agent for a disgruntled litigant and posted false
and inflammatory accusations against the company.
Lennar dropped almost 20 percent to $9.15. The Dow Jones
home construction index <.DJUSHB> fell 5.2 percent.
For the week, the Dow fell 4.8 percent, the S&P shed 4.5
percent and the Nasdaq slid 3.7 percent.
The Dow has fallen three straight sessions and four of the
last five, and is down nearly 32 percent from 52 weeks ago.
Volume was light on the New York Stock Exchange, where
about 1.16 billion shares changed hands, below last year's
estimated daily average of 1.49 billion. On the Nasdaq, about
1.93 billion shares traded, also below last year's daily
average of 2.28 billion.
Decliners outnumbered advancers on the NYSE by a ratio of
about 5 to 2, while on the Nasdaq about three stocks fell for
every one that rose.
(Editing by James Dalgleish)
