U.S. Stocks Extend Losses As Economic Worries Mount

NEW YORK (MarketWatch) -- U.S. stocks on Wednesday thudded lower as an unexpected slide in February factory orders reignited worries about the economy and news that a buyout of Clear Channel Communications Inc. might be in jeopardy also weighed on sentiment.

"By signaling a decline in business spending, which has declined in each of the past eight recessions, today's report is consistent with economic recession," said Tony Crescenzi, chief bond market strategist at Miller Tabak & Co, of the factory data.

The Dow Jones Industrial Average fell 146.94 points to 12,385.66, with 26 of its 30 components posting declines and financials leading the way lower.

Early broker action had Oppenheimer & Co. cutting first-quarter profit forecasts for U.S. banks on average by 84%, led by Citigroup Inc. , its stock recently off 5.3%.

The S&P 500 declined 15.39 points to 1,337.60, while the Nasdaq Composite shed 33.33 points to 2,307.72.

Volume on the New York Stock Exchange topped 1 billion, with declining stocks outrunning those advancing more than 2 to 1. On the Nasdaq, 506 million shares traded, and decliners beat advancing issues, also by more than 2 to 1.

On the New York Mercantile Exchange, crude-oil futures gained $3.49 to $104.71 a barrel, while gold futures climbed $12.40 to $947.4 an ounce.

The dollar extended its fall against the yen and remained weak against the euro, with the dollar index, which measures the U.S. currency against major counterparts, at 71.75, down from 72.053 in late U.S. trading Tuesday.

Credit woes a backdrop?

"Credit market concerns appear to have been pushed somewhat to the background, and have been replaced by U.S. recession fears, which have weighed on the dollar most recently," said analysts at Action Economics.

Ahead of the opening bell, the Commerce Department reported demand for durable goods fell 1.7% last month, surprising analysts who projected a slight rise after the prior month's 4.7% decline. .

In a later report, the Commerce Department estimated sales of new homes fell to a 13-year low in February, with the projection less bleak than economists expected. .

A $19 billion deal to take Clear Channel private is about to fall apart over credit terms, The Wall Street Journal reported Tuesday afternoon. .

Clear Channel shares were down 19% in recent action.

In corporate developments, Motorola Inc. shares rose 1% after the board of directors approved a plan to break the company into two independent, publicly traded companies.

Take-Two Interactive Software Inc. shed early gains, recently down 0.2%, after it rejected as "inadequate" a $26-a-share cash bid from Electronics Arts Inc. .

Shares of Electronic Arts were hit even harder, recently down 2.3%.

Ford Motor Co. said it is selling its Jaguar and Land Rover brands to India's Tata Motors Ltd. for $2.3 billion in cash. .

Oracle Corp. stocks fell 1.1% in early trade ahead of the business software giant's third-quarter earnings results after the close. .

In overseas trade, stocks in Europe weakened as a one-day rally failed to spark momentum. .

Asian markets were mixed, with shares in Japan ending lower while stocks gained in Hong Kong and Australia. .

On Tuesday, stocks were mixed after a two-session rally.

By Kate Gibson