* Citigroup slides; loss worries offset venture plan
* Alcoa, other resources stocks tumble on economic gloom
* Dow down 0.8 percent; S&P 500 falls 1.5 percent, Nasdaq
sheds 1.5 percent
* For up-to-the-minute market news, click []
(Updates to early afternoon, changes byline)
By Rodrigo Campos
NEW YORK, Jan 12 (Reuters) - U.S. stocks slid on Monday,
hurt by worries that fourth-quarter earnings reports, which
begin with aluminum producer Alcoa later in the day, will show
the recession is worsening.
Concerns about the prospect for more financial sector
losses stemming from the credit crisis also added to the
negative tone, with shares of Citigroup <C.N> sliding nearly 8
percent, and JPMorgan Chase <JPM.N> off more than 3 percent.
Alcoa Inc <AA.N> posts financial results after the market's
closing bell. After Deutsche Bank recommended selling the
stock, the blue-chip aluminum producer fell nearly 8 percent on
the New York Stock Exchange.
Investors can't see where any encouraging news will come
from, and profit outlooks could be even bleaker than the
market's already meager expectations, traders said.
"Investors don't see catalysts. There's a real worry that
earnings estimates are just too optimistic," said Jack Ablin,
chief investment officer at Harris Private Bank in Chicago.
Fourth-quarter S&P 500 earnings are expected to decline
15.1 percent from a year earlier, marking the sixth straight
quarterly decline in profits, according to Thomson Reuters
estimates.
The Dow Jones industrial average <> fell 68.82 points,
or 0.80 percent, at 8,530.36. The Standard & Poor's 500 Index
<.SPX> shed 13.63 points, or 1.53 percent, at 876.72. The
Nasdaq Composite Index <> lost 22.93 points, or 1.46
percent, at 1,548.66.
The slide made a dent in the market's gains since the Nov.
21 low and increased the indexes' losses since the start of
2009. Even so, the benchmark S&P 500 index is 16.3 percent
above its November low.
The fall in Citigroup shares followed news that the
embattled U.S. bank is nearing a deal to sell a controlling
stake in its Smith Barney retail brokerage business to Morgan
Stanley <MS.N>. For more see [].
"The perception is that this is a desperate measure taken
by a firm in turmoil to try to throw itself a lifeline," Ablin
added.
The Wall Street Journal, citing people familiar with the
matter, said Citigroup would likely report a quarterly loss of
at least $10 billion.
In another sign of the deepening recession, copper prices
slid 6 percent after a source said China's State Reserves
Bureau could have suspended planned copper purchases
[].
Investors also sold off shares of energy companies
including Exxon Mobil <XOM.N> on concerns oil demand will be
hurt by the economic slump. U.S. crude oil futures fell 6.8
percent to $38.09 a barrel.
Alcoa, down 7.6 percent to $9.99, was among the top drags
on the Dow, while the S&P materials index <.GSPM> shed 3
percent.
Caterpillar <CAT.N>, a maker of excavators and bulldozers,
was the top drag on the Dow with a slide of 3.2 percent to
$41.80 on the NYSE.
On Nasdaq, shares of Apple Inc <AAPL.O> fell 2.2 percent to
$88.56.
But there were bright spots due to deal activity. Shares of
Advanced Medical Optics <EYE.N> surged 144 percent to $21.61
after the company agreed to be bought by Abbott Labs <ABT.N>
for nearly $1.4 billion. [].
In response to the faltering economy, President-elect
Barack Obama asked President George W. Bush to seek from
Congress the remaining $350 billion of the $700 billion
financial industry bailout, and he agreed to do so, the White
House said.
Obama, who will be sworn in on Jan. 20, has vowed to
restructure Washington's financial rescue plan to stem mortgage
loan foreclosures.
(Additional reporting by Ellis Mnyandu; Editing by Kenneth
Barry)
