Wall Street Falls Hard

A slight bit of good news came from the Conference Board, whose December consumer confidence index rose to 88.6 from a revised 87.8 in November. Economists anticipated a slight decline to 87.

"There's been a whole series of bad news coming out, and given thin holiday volume, it's easy to push the market down," said Edgar Peters, chief investment strategist with Pan Agora. "There's a bad negative tone as the economic data are weak, but isn't weak enough to ensure a [Federal Reserve] rate cut. It's simply a buyer's strike today."

Financials were in the spotlight after Goldman Sachs increased its writedown projections for Citigroup (C Quote - Cramer on C - Stock Picks), Merrill Lynch (MER Quote - Cramer on MER - Stock Picks) and JPMorgan Chase (JPM Quote - Cramer on JPM - Stock Picks). The firm now expects a combined $33.6 billion in fourth-quarter writedowns to be announced.

Citigroup finished down 2.9%, Merrill was off 2.5%, and JPMorgan shed 2.9%. Subsector indices retreated, with the Amex Securities Broker/Dealer Index falling 2.1% and the NYSE Financial Sector Index decreasing 1.6%.

Elsewhere, Fitch Ratings said it has placed the credit ratings for residential mortgage-backed securities backed by bond insurers on watch for a possible downgrade.

Among those that could be affected are 87 securities insured by MBIA (MBI Quote - Cramer on MBI - Stock Picks), 64 by Ambac Financial (ABK Quote - Cramer on ABK - Stock Picks) and 19 by Security Capital Assurance (SCA Quote - Cramer on SCA - Stock Picks). MBIA was 0.7% higher, while Ambac and Security Capital gave up ground.

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