Busy day on Wall Street

Market down over 2%, led by several key stocks.

Story 1: Bad news (REALLY bad news) from Citi

Citigroup reported its first quarterly loss since 1998 and the largest loss in the bank's 196-year history. It slashed its dividend by 41% and raised more than $12 billion to bolster its capital position. The company swung to a fourth-quarter loss of $9.83 billion, or $1.99 a share. Continued woes in the subprime-mortgage market caused the bank to book pre-tax write-downs and credit costs of about $18.1 billion. Revenue dropped 70% to $7.22 billion from $23.83 billion. This was the worst quarter in Citi's 196 year history. Its stock fell $2.12 (7.3%) to $26.94. It took JP Morgan Chase and Merrill Lynch, both down 5.29%, with it.

Story 2: Bank of America exiting investment banking

Bank of America today outlined a streamlined corporate and investment banking unit that guards the functions most closely aligned with serving large businesses but eliminates or scales back more exotic trading functions. Bank of America is selling its prime brokerage, which lends to hedge funds. The company is also gutting parts ofits trading unit and shutting down such structured products areas as CDOs. Bank of America will lay off 650 people in its global corporate and investment bank in the coming weeks, in addition to 500l ayoffs announced in October after the unit posted disastrous third-quarter results. (Source: WSJ) The stock dropped 3.4%. Also, its upcoming acquisition Countrywide was down 4.6%.

Other bank stocks were clobbered too. Wells Fargo was down 6.1%; State Street was down 5.94%; Washington Mutual was down 5.1%; Wachovia Bank was down 4.38%.

Story 3: Apple down

Despite revealing its new (super-cool) machine at MacWorld, Apple shares went down $9.74 (5.45%) to $169.04. I'll note that the stock is now down 16.7% from its 52-week high of $202.96 just two weeks ago.

As an aside, not a big market mover, but Krispy Kreme was down 9% to $2.32, a 52-week low.