Wall Street Falls Hard

Soft economic data and Bhutto's death keep buyers at a distance.
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Updated from 4:08 p.m. EST

Stocks closed sharply lower Thursday as the assassination of Benazir Bhutto and weaker-than-expected domestic economic data kept buyers sidelined all session.

The

Dow Jones Industrial Average

was down 192.08 points, or 1.42%, to 13,359.61, while the

S&P 500

lost 21.39 points, or 1.43%, to 1476.27. The

Nasdaq Composite

was off 47.62 points, or 1.75%, at 2676.79.

Breadth was decidedly negative. On the

New York Stock Exchange

, 2.31 billion shares changed hands, and volume on the Nasdaq reached 1.40 billion shares. Losers outpaced winners 3 to 1.

Equities were under pressure in part because of violence in south Asia, where Bhutto, the Pakistani opposition leader and former prime minister, was killed by a gunman and bomber at a political rally.

Gold futures topped $830 an ounce and crude oil closed in on $97 a barrel after the news of her death. U.S. Treasury prices rallied, as well, with the 10-year note rising 22/32 in price, yielding 4.19%. The 30-year bond jumped 1-6/32 in price, yielding 4.60%.

There was also disappointment on the economic front after the Commerce Department said durable goods orders rose an anemic 0.1% last month, compared with expectations of a 2.5% increase.

In another report, the Labor Department said initial jobless claims unexpectedly rose by 1,000 claims last week to 349,000 claims. Economists had expected claims would fall to 340,000. The four-week moving average slipped by 1,000 to 342,500.

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) - Get Report

,

Merrill Lynch

(MER)

and

JPMorgan Chase

(JPM) - Get Report

. 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) - Get Report

, 64 by

Ambac Financial

(ABK)

and 19 by

Security Capital Assurance

(SCA) - Get Report

. MBIA was 0.7% higher, while Ambac and Security Capital gave up ground.

Also in the sector, shares of

SLM Corp.

(SLM) - Get Report

, commonly known as Sallie Mae, ended down 11.2% after the lender said it will sell $2.5 billion in common stock in order to buy out certain liabilities. SLM dropped $2.48 to $19.65.

Shares of

Apple

(AAPL) - Get Report

hit a record $202.96 before ending down 38 cents, or 0.2%, to $198.57. The move came after the stock crossed the $200 level for the first time during the prior session.

Following the close, the company said it has a deal in place with

News Corp.

(NWS) - Get Report

to offer movie rentals over the Internet through its iTunes digital media service.

Overseas markets were mixed. Hong Kong's Hang Seng slipped 1%, and Japan's Nikkei lost 0.6% overnight. Among European bourses, London's FTSE 100 tacked on 0.3%, and Germany's Xetra Dax rose 0.5%.