Monday's early afternoon trade: Wall Street falls on credit, consumer worries

US stocks fell on Monday on investor concern about rising mortgage defaults and credit market losses and uncertainty about consumer spending during the holiday shopping season. Leading the decline were financial services companies, including Citigroup Inc, the largest US bank, which fell more than 4 percent, making the stock the biggest drag on the Dow and S&P 500.
Shares of home builders, including KB Home, also took a beating following a broker downgrade of the sector, sending the Dow Jones home construction index sliding nearly 4 percent. Doubts about the strength of the holiday shopping season added to the negative tone, with shares of No 2 US discounter Target Corp down more than 2 percent. Department store operator Macy's Inc tumbled 4 percent.
The S&P financial index was down 2.1 percent, while the S&P retail index shed more than 1 percent. The Dow Jones industrial average was down 31.70 points, or 0.24 percent, at 12,949.18. The Standard & Poor's 500 Index was down 8.68 points, or 0.60 percent, at 1,432.02. The Nasdaq Composite Index was down 8.63 points, or 0.33 percent, at 2,587.97.
In the latest sign of trouble in housing, Freddie Mac and Fannie Mae fell sharply after UBS downgraded the mortgage finance companies, citing increased mortgage losses and erosion of other home-loan investments.
The sell-off in shares of financial services companies coincided with a report from Goldman Sachs saying that HSBC, Europe's biggest bank, would likely need a further $12 billion in provisions for its US subprime mortgages and home equity loans.
HSBC on Monday provided up to $35 billion to support its two structured investment vehicles, or SIVs. SIVs have been battered by the recent subprime-related credit turmoil.
Citigroup shares were down 4.9 percent at $30.14 on the New York Stock Exchange after hitting a five-year low. Shares of Bank of America Corp, the No 2 US bank, fell 1.4 percent to $42.53. KB Home shares shed 5.6 percent to $20.48 on the NYSE after Citigroup cut its rating on the stock and downgraded shares of other home builders.
Shares of Fannie Mae, the No 1 US home financing source, slid 7.3 percent to $29.86 and Freddie Mac shares dropped 8.1 percent to $24.33. On the Nasdaq, shares of Cisco Systems Inc led decliners, falling 3.4 percent to $27.72. The network equipment maker recently rattled technology investors by saying fallout from the credit crisis was hurting demand from key clients, including banks.