U.S. Stocks Decline, Poised for Worst Fourth Quarter Since 2000

Dec. 29 (Bloomberg) — U.S. stocks fell and were poised for their first fourth-quarter decline since 2000 after government reports on durable goods and unemployment reinforced speculation the housing-market collapse will push the economy into recession.

Citigroup Inc., JPMorgan Chase & Co. and Merrill Lynch & Co. dropped after Goldman Sachs Group Inc. analyst William Tanona predicted the firms may write down an additional $34 billion of assets linked to subprime mortgages. KB Home and Macy’s Inc. led builders and retailers lower after falling home prices and sales heightened concern that sinking property values will slow consumer spending.

Lower-than-forecast orders for durable goods in November and an unexpected rise in jobless claims last week added to evidence that the housing slump is spreading to the broader economy. The Standard & Poor’s 500 Index has declined 3.2 percent since the end of September, paring its 2007 advance to 4.2 percent.

“It’s a struggle right now,” said Edward Hemmelgarn, who oversees about $350 million as president of Shaker Investments Inc. in Cleveland. “If you look at the economic news, most of it is more negative.”

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