Dismal Data Depress Wall Street

Updated from 4:11 p.m. EST

Stocks in New York ended Wednesday's session with steep losses as the market absorbed a plethora of dismal data and warnings, punishing equities across sectors.

Led by a 23% decline in Citigroup (C Quote), the Dow Jones Industrial Average was swathed in red, sinking 248.42 points, or 2.9%, to 8200.14. The S&P 500 lost 29.17 points, or 3.4%, to 842.62, and the Nasdaq declined 56.82 points, or 3.7%, to 1489.64.

As stocks declined, longer-dated Treasuries moved higher. The 30-year note gained 2 16/32, yielding 2.9%, while the 10-year added 30/32 to yield 2.1%.

The Real Story Wrap: January 14

The Federal Reserve's beige book, which provides details about the strengths and weaknesses of the nation by region, reported Wednesday that overall economic activity continued to weaken across almost all of the Federal Reserve districts. Manufacturing activity in most industries continued to fall in the majority of districts, as did lending activity, according to the report.

As expected, Citigroup announced late Tuesday that Morgan Stanley would pay $2.7 billion for a 51% stake in a combined brokerage operation, the largest in the world.

Investors, losing confidence in Citi's ability to sustain itself as a whole and without more government help, sent shares down 23% to $4.53 Wednesday. Reports surfaced late Tuesday that Citi's agreement with Morgan Stanley would be the first in a series of initiatives that would essentially take apart Citi's financial supermarket model.

The bank, which has received $45 billion in federal aid and is expected to post its fifth straight quarterly loss, accelerated its fourth-quarter earnings release by a week to Jan. 16. JPMorgan Chase (JPM Quote) will release its results on Thursday, also a week ahead of schedule.