MARKET SNAPSHOT: U.S. Stocks Finish At 2009 Lows Amid Earnings Jitters

By Kate Gibson

U.S. stocks on Monday sank to their lowest levels so far this year, with financials hammered the hardest. Investors appeared leery of what is likely to be an especially grim earnings season.

"When you get a lot of reduction in earnings estimates going to the earnings season, it usually gives you at least a lower hurdle to jump over. I would still be surprised if we could make it over that hurdle," said Bill Stone, chief investment strategist at PNC Wealth Management.

Stone predicts earnings-reporting season will fall in line with expectations, except for one sector: "The financials will be worse than people expect," he added. Listen to more.

Off for a fourth consecutive session, the Dow Jones Industrial Average (DJI) fell 125.13 points, or 1.5%, to 8,474.05, with 25 of its 30 components ending lower.

Weighing the most on the blue-chip index, Citigroup Inc. (C) shares fell 17% with the banking powerhouse reportedly near a deal to combine its brokerage business with Morgan Stanley. Shares of Morgan Stanley (MS) shed 1.4%.

Another Dow laggard, Alcoa Inc. (AA) shares declined 6.9% after its downgrade by Deutsche Bank to a sell from a hold in the wake of last week's announced cuts in production and employees by the aluminum giant.

Alcoa reports its earnings after the market closes, with analysts expecting a loss of 10 cents a share. .

Intel Corp.(INTC) reports its results Thursday, with the chip maker and Wal-Mart Stores Inc. (WMT) among the companies offering bleak forecasts last week.

Shares of technology firm Palm Inc. (PALM) fell nearly 1% after its upgrade to hold by Citibank. .

The S&P 500 Index (SPX) fell 20.09 points, or 2.3%, to 870.26, with financials fronting the losses that stretched to include all 10 of the index's industry groups, as big declines in real-estate investment trusts and life insurers socked the broader sector. .

Energy and materials also weighed heavily.

The Nasdaq Composite Index (RIXF) declined 32.8 points, or 2.1%, to 1,538.79. .

Volume on the New York Stock Exchange exceeded 1.3 billion, and decliners outpaced advancers more than 3 to 1. On the Nasdaq, more than 688 million shares traded and decliners routed advancers 4 to 1.

Crude moves

Oil futures tumbled for a fifth straight session below $38 a barrel as the global economic downturn continued to fuel worries about demand. Crude for February delivery ended down $3.24, or 7.9%, at $37.59 a barrel on the New York Mercantile Exchange. .

Gold futures fell to a one-month low, with gold for February delivery down $34 to finish at $821 an ounce.

Overseas, stocks in Europe declined for a fourth straight session, as worries over the global economy sent oil-sector companies lower. .

Asian shares also fell amid weakness among steelmakers and miners.

On Friday, stocks fell for a third consecutive day after the government reported the nation's unemployment rate climbed to 7.2% in December from 6.8% the prior month.

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