U.S. stocks tumbled to a three-month low, extending a global slump, as a record contraction in New York manufacturing spurred concern the government's stimulus package won't be enough to curb the deepening recession.

A person walks through the business district in Tokyo, Japan. Stocks fell sharply in Japan and the US today as the recession in both countries continues to deepen. (Photo: Kim Kyung-hoon / Reuters)

    Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. lost at least 8 percent. General Motors Corp., the biggest U.S. carmaker, retreated 15 percent before taking its case for more government support to the Treasury today. Financial shares led declines in Europe and Asia on concern banks may face ratings downgrades and further losses.

    The Standard & Poor's 500 Index retreated 3.6 percent to 796.8 at 10:08 a.m. in New York, dropping below 800 for the first time since November. The Dow Jones Industrial Average fell 247.07 points, 3.2 percent, to 7,603.34. The Russell 2000 Index decreased 3.4 percent. U.S. markets were closed yesterday for President's Day.

    "There's a growing sense that no matter who's in office, no matter how much they spend and on what, it's going to be a long, painful process to get out of this situation and restore the economy to normalcy," said Michael Shinnick, manager of the $100 million Wasatch-1st Source Long/Short Fund, which has returned 1 percent this year as the S&P 500 has retreated 11 percent.

    All 10 industry groups in the S&P 500 declined after a Federal Reserve report showed manufacturing in New York contracted in February at the fastest pace on record, signaling the recession is deepening. The Fed Bank of New York's general economic index slid to minus 34.7, the lowest level since records began in 2001, from minus 22.2 percent in January.

    Stimulus Signing

    President Barack Obama today is expected to sign into law a $787 billion stimulus package that combines tax breaks and government spending designed to resuscitate the moribund U.S. economy.

    U.S. stocks last week fell the most since November after Treasury Secretary Timothy Geithner failed to convince investors that his bank rescue will work.

    Stocks in Europe and Asia retreated today after Moody's Investors Service said it might downgrade banks with units in Eastern Europe and the cost for South Korean banks to borrow dollars rose to a record. The regions' shares fell yesterday as Japan's economy contracted the most since 1974, Britain was warned it faces the worst recession in almost three decades and the Group of Seven offered no solution to revive global growth.

    Citigroup, that bank that received $45 billion from the government last year, lost 9.2 percent to $3.17. JPMorgan, the second-largest U.S. bank by assets, declined 8.1 percent to $22.70. Bank of America tumbled 9.6 percent to $5.04.

    GM Support

    GM dropped 15 percent to $2.12 for the biggest slide in the Dow average. The company and Chrysler LLC, already relying on government aid to survive, take their case to the U.S. Treasury today in an attempt to justify more U.S. aid.

    GM may seek support beyond an $18 billion request made Dec. 2 because of worsening economic conditions, people familiar with the company's plan said. The automaker is considering shutting or selling as many as four European plants as it tries to meet the terms of the government bailout, according to a person familiar with the proposals.

    Wal-Mart Stores Inc. added $1.64, or 3.5 percent, to $48.17. The world's largest retailer reported fourth-quarter profit excluding some items of $1.03 a share, beating the 99-cent average analyst estimate in a Bloomberg survey. Wal-Mart forecast first-quarter earnings of 72 cents to 77 cents a share, compared with an average analyst estimate of 77 cents.

    Japanese Recession

    The Japanese economy, the world's second-biggest, contracted at an annual 12.7 percent pace in the fourth quarter, according to figures from the Cabinet Office. The U.K.'s GDP probably will shrink 3.3 percent this year, instead of the 1.7 percent predicted in November, the Confederation of British Industry said yesterday.

    Coca-Cola Co., the world's largest soft-drink maker, dropped 2 percent to $42.99. Coca-Cola Hellenic Bottling Co., the second- biggest bottler of Coke beverages, posted an unexpected fourth- quarter loss and said it was "not meaningful" to provide any earnings forecasts because of economic declines. Athens-based Coca-Cola HBC is 24 percent owned by Coca-Cola Co.

    Sirius XM Radio Inc. jumped 82 percent to 19 cents. The satellite broadcaster will receive $530 million in loans from John Malone's Liberty Media Corp. in exchange for board seats and an equity stake, avoiding a bankruptcy filing.

    Wyndham Worldwide Corp. climbed 2.2 percent to $4.27. The largest seller of timeshare vacation units withdrew plans to sell as much as $200 million in new shares after its Feb. 13 announcement triggered a 30 percent drop in its existing shares.

    Diamond Offshore Drilling Inc. rose 3.3 percent to $65.50. The second-largest deepwater oil driller by market value was picked to replace Weatherford International Ltd. in the S&P 500. Weatherford, the fourth-largest U.S. oilfield services provider, fell 9.2 percent to $9.65.

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