US stocks dropped Monday after US banking giant Citigroup announced a massive job cut, extending a steady decline over the last two weeks amid concerns of a deepening recession, dpa reported.
Citigroup said Monday that it was eliminating about 53,000 jobs from its international workforce and cutting costs by 20 per cent after suffering huge losses in the global financial crisis.
Citigroup has been in the red for four consecutive quarters and currently has losses of more than 20 billion dollars. It is likely to post fourth-quarter losses of about 187 million dollars, the Bloomberg financial news agency reported.
Other US financial institutions, such as JP Morgan Chase, are believed to be planning further job cuts. At least 160,000 jobs have so far been lost in the banking industry worldwide as a result of the credit crisis.
"You're going to continue to get barraged with bad economic data," Bill Stone, chief investment strategist at PNC Wealth Management, told Bloomberg TV. "Earnings have hit a wall or fallen off a cliff in a lot of cases. You're not likely to see much help from this front for a while."
Meanwhile, the White House and Congressional Democrats agreed Monday that something must be done to rescue the US automotive industry, but they were far apart on how to get there.
Congressional Democrats appeared intent on taking 25 billion dollars from the 700-billion-dollar emergency bail-out legislation to help the industry, and were formulating further legislation.
But Republicans and the White House have signalled their opposition and want Congress to pursue a different avenue to find a loan under Department of Energy legislation.
"Once you start down that road" of opening the 700-billion-dollar fund for individual industries, "it's a slippery slope to other industries that might say that they need help," said White House spokeswoman Dana Perino.
The auto industry has already seen 25 billion dollars approved to develop lower-emissions technology, and congressional leaders want to find another 25 billion dollars for them by year's end.
US auto sales plummeted 32 per cent in October to the slowest month since 1991 as the industry continued to lose cash and shed jobs.
On Monday, the blue-chip Dow Industrial Average dropped 223.73 points, or 2.63 per cent, to 8,273.58. The broader Standard & Poor's 500 Index shed 22.54 points, or 2.58 per cent, to 850.75. The Nasdaq Composite Index fell 34.8 points, or 2.29 per cent, to 1,482.05.
The US currency dropped to 79.15 euro cents from 79.33 euro cents on Friday. Against the Japanese currency, the dollar fell to 96.377 yen from 97.14 yen on Friday.
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