Pakistani news sends Dow lower

NEW YORK - Stocks skidded yesterday after the assassination of Pakistani opposition leader Benazir Bhutto and after the Commerce Department's report on durable-goods orders increased concerns about the U.S. economy. The major indexes each lost more than 1 percent, and the Dow Jones industrial average fell 192 points.

Bhutto's assassination raised the possibility of increasing political unrest abroad. Oil prices rose after the news, and that unwelcome inflationary trend only added to Wall Street's uneasiness.

The government said orders for durable goods - big-ticket items such as commercial jetliners and home appliances - rose just 0.1 percent last month. Economists had been looking for a rise of 2.2 percent. Still, November saw the first rise in durable-goods orders in the last four months.

The Labor Department said the number of workers seeking unemployment benefits showed a surprise increase last week. Applications filed for unemployment insurance rose a seasonally adjusted 1,000, to 349,000. Economists had been expecting the figure to fall to around 340,000 for last week.

But the Conference Board said its Consumer Confidence Index advanced to 88.6 in December from a revised 87.8 in November. It was the first increase since July, and Wall Street had expected a slight drop.

Investors track the employment and consumer-confidence figures because consumer spending represents about two-thirds of economic activity in the United States.

The Dow fell 192.08, or 1.42 percent, to 13,359.61. The Standard & Poor's 500 index declined 21.39, or 1.43 percent, to 1,476.27, and the Nasdaq composite index fell 47.62, or 1.75 percent, to 2,676.79.

Light, sweet crude rose 65 cents to settle at $96.62 a barrel on the New York Mercantile Exchange after Bhutto's death. Prices also lifted after the Energy Department said oil inventories fell 3.3 million barrels last week, more than double what was expected.

The financial sector also commanded attention. The Goldman Sachs Group Inc. predicted that the flood of write-downs at banks tied to soured mortgages would continue.

Goldman said Citigroup Inc. might be forced to write off 70 percent more than the $8 billion to $11 billion Citi forecast in early November. Citi could also cut its dividend and might need to raise $5 billion to $10 billion more in cash, Goldman estimated.

Citi, one of the 30 stocks that make up the Dow Jones industrials, fell 89 cents, or 2.92 percent, to $29.56.

Goldman also raised concerns about Merrill Lynch & Co. Inc., which fell $1.34, or 2.46 percent, to $53.20, and JPMorgan Chase & Co. declined $1.30 to close at $43.64.

The Russell 2000 index of smaller companies fell 23.52, or 2.95 percent, to 773.51.

Japan's Nikkei stock average fell 0.57 percent.