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) - Get Report

, 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

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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) - Get Report

will release its results on Thursday, also a week ahead of schedule.

Deutsche Bank

(DB) - Get Report

warned of a fourth-quarter loss of roughly $6.33 billion, while Morgan Stanley analysts said

HSBC

(HBC)

may have to raise as much as $30 billion and slice its dividend in half. Shares of DB lost 9.1% to $28.98, and HSBC gave up 8% to $42.19.

Plagued by the economic downturn, companies continue scale back operations in reaction to declines in revenue.

Software company

Oracle

(ORCL) - Get Report

has cut "several hundred" of its more than 86,000-employee workforce, according to two sources close to the situation,

Reuters

reported. Shares were off by 4.6%, at $16.36, Wednesday.

Also

Nortel Networks

(NT)

, which has dwindled to 32 cents a share, is expected to file for

bankruptcy protection

as early as Wednesday, according to a report in Toronto's

Globe and Mail

.

Seagate Technology

(STX) - Get Report

announced another round of staff cuts Wednesday, bringing the hard-drive maker's total layoffs announced this week to 2,950, or 6% of its workforce.

Luxury jeweler

Tiffany

(TIF) - Get Report

, down a fraction of a percent at $21.95, warned Wednesday that its fourth-quarter profit suffered dim holiday same-store sales and reined in its full-year earnings forecast again.

Retailers were subject to declines nearly twice as severe as expected according to data released from the Census Bureau on Wednesday. It reported that

retail sales for December

declined 2.7%, vs. an anticipated decline of 1.2%. Factoring out autos, retail sales declined 3.1%, vs. a 2.5% decline in the prior month and the expectation for a 1.4% decline.

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Meanwhile, the Labor Department reported that the import price index declined by 4.2%, vs. a 7% decline a month prior, led by decreases in both petroleum and non-petroleum prices. The import and export prices can be used to indicate inflation pressures created by changes in foreign exchange rates.

Overall, import prices fell 9.3% in 2008, the first year the index declined since a 9.1% drop in 2001 and the largest calendar year decline since the index was first published in 1982.

The export price index fell 2.3%, less steep than the 3.4% decline a month earlier. Export prices declined 3.2% in 2008, the first calendar year drop since 2001 and the largest since 1998.

In other data Wednesday, the Mortgage Bankers Association said that the market composite index, a measure of mortgage loan application volume increased 15.8% on a seasonally adjusted basis to 1324.8 for the week ended Jan. 9. The Refinance Index increased 25.6%, its highest level since 2003, while the seasonally adjusted Purchase Index fell 14.1%.

The MBA said the average contract interest rate decreased to 4.89% percent from 5.07% for 30-year fixed-rate mortgages, and decreased to 4.63% from 4.67% for 15-year fixed-rate mortgages.

The dollar was lately weaker against the euro, pound and yen.

In commodities, oil gave up a nickel to settle at $37.28 a barrel, while gold fell $11.90 to settle at $808.80 an ounce.

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Overseas, the FTSE in London and the DAX in Frankfurt were both edging lower Wednesday, but Japan's Nikkei Hong Kong's Hang Seng ended in positive territory.

Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. AP contributed to this report.