Dow off 52 on financial stock weakness

The stock market was saved from a major loss today thanks to the technicians whose buying turned a nasty sell-off into a draw.

Citigroup (C, news, msgs) dropped 4.9% to $35.90 and financial stocks in general were weak amid worries about losses related to the mortgage market. Yet the Dow Jones industrials finished the day down nearly 52 points, or 0.4%, to 13,543.

The Standard & Poor's 500 Index was off 7.5 points, 0.5%, to 1,502, and the Nasdaq Composite Index was off 15 points, or 0.5%, to 2,795.

The market's fallback came as crude oil moved lower, closing at $93.98 a barrel in New York. Energy stocks were down slightly.

Only 10 of the 30 Dow stocks finished higher, along with just 145 S&P 500 stocks and 18 of the 100 stocks in the Nasdaq-100 Index ($NDX.X). The latter index was down 0.6% to 2,200.48

Here's why one should thank the technicians. At 2:30 p.m. ET, the S&P 500, weighed by more losses among financial stocks, hit 1,490, a loss of 19 points from Friday's close.

For traders who watch charts, 1,490 was setting up as a strong support level. The S&P had dropped near or to that level in the last few days and rebounded each time.

Sure enough, the index held today. Short-sellers, who had sold borrowed shares, especially financial shares, bought them back and booked their profits. Bargain hunters picked up what they thought were deals if only because they didn't believe the financial system was about to fall apart. The index jumped 18 points in the next hour, briefly pushing into the black.

Waiting for more bad news

The Dow was down as many as 148 points before the rebound set in. Whether that the rebound continues remains to be seen.

The big problem weighing on the market remains the depth of the subprime-mortgage-market mess that cost Chuck Prince his job as CEO of Citigroup on Sunday and Stan O'Neal the top position as Merrill Lynch (MER, news, msgs).

Right now, there is extreme reluctance to buy financial stocks, which represent a bit less than 20% of the market capitalization of the S&P 500.

The reason: Nobody understands how deep the losses that financial companies like Citigroup, Merrill Lynch and others will be forced to absorb -- and that includes the top managements of all these companies.

Result: Many investors started to look for the candidates to disclose the next round of bad news.

The likeliest candidates today were Goldman Sachs (GS, news, msgs), which fell more than 4.9% to $218.39, and Morgan Stanley (MS, news, msgs) fell 5.6% to about $55.59.

The Amex Securities Broker/Dealer Index ($XBD.X) was down 2.7% to just under 214.

Google gets a pop from its mobile strategy

Google's (GOOG, news, msgs) announcement that it will release open-source software for mobile telephones did little for the market overall. But it helped Google shares rise 2% to $725.65, a new closing high; the stock had peaked at $730.23.

The Amex Interactive Week Internet Index ($IIX.X), however, was basically flat at just under 254, even though Google is 9% of the value of the index.

Apple (AAPL, news, msgs) and Microsoft (MSFT, news, msgs) were both down slightly less than 1% on the Google news, to $186.18 and $36.73, respectively. Google could be a threat to Apple's iPhone, and a mobile operating system could affect Microsoft, which builds software used in phones.

(Microsoft is the publisher of MSN Money.)

Meanwhile, online auctioneer eBay (EBAY, news, msgs) fell 2.6% to $34.10 on a downgrade by Bear Stearns analyst Robert Peck, who said the company could sacrifice near-term profit growth while it invested in new technology to remain competitive.

Tomorrow brings earnings from the St. Joe Co. (JOE, news, msgs), the Florida real estate developer; Ruth's Chris Steak House (RUTH, news, msgs); and freight mover Expeditors International (EXPD, news, msgs).

Citigroup's big loss costs Price

Prince became the latest chief executive to fall victim to the subprime-mortgage-market meltdown. Prince resigned as chief executive officer of the nation's largest bank on Sunday, and Citi Europe Chairman Win Bischoff was named interim CEO. Former Treasury Secretary Robert Rubin was named chairman.

The bank announced it would write down $8 billion to $11 billion in the value of the mortgage-related securities. Citigroup already had announced $2.2 billion in write-downs for the third quarter.

• Get free, real-time stock quotes on MSN Money

"It is my judgment that, given the size of the recent losses in our mortgage-backed securities business, the only honorable course for me to take . . . is to step down," Prince said in a statement.

• More on Citigroup's problems

Energy prices -- New York close

	Mon.	Fri.	Chg.	Month chg.	YTD chg.
Crude oil (NYMEX) (per barrel)	$93.98	$95.93	-$1.95	-0.58%	53.94%
Heating oil (per gallon)	$2.5439	$2.5737	-$0.0298	1.44%	59.20%
Natural gas (per million BTU)	$7.9990	$8.4180	-$0.4190	-3.97%	26.99%
Unleaded gasoline (per gallon)	$2.3811	$2.4395	-$0.0584	1.76%	48.62%

Service sector expands

One reason stocks aren't totally falling apart on the Citigroup news is some surprisingly strong data about the service sector.

The Institute for Supply Management's index of nonmanufacturing industries rose to a reading of 55.8 in October -- up from 54.8 in September -- and better than the 54 that economists expected.

Readings above 50 indicate expansion, while readings below 50 indicate contraction.

Time Warner chief stepping aside

Time Warner (TWX, news, msgs) is in the replace-a-CEO game.

The company named Chief Operating Officer Jeff Bewkes to succeed Dick Parsons this afternoon. Parsons announced he will step aside on Jan. 1 but will remain as chairman.

Shares of the stock were down slightly to $17.81.

IAC/Interactive to split five ways

IAC/Interactive (IACI, news, msgs) is splitting up.

The interactive commerce company is breaking into five parts: IAC, which will include Match.com; HSN, which will include HSN TV; Ticketmaster; Interval International; and LendingTree.

• Video: More on IAC/Interactive's split

CEO Barry Diller said in a statement that the move will help him prioritize the faster-growing businesses. "While we've created a lot of value, I've always believed our complexity and many mouthfuls of sentences to explain who we are and what our strategy is have hampered clarity and understanding with all our constituencies, particularly investors," Diller said.

Diller is staying on as CEO of IAC.

Shares rose 7.5% to $31.84 today. Wall Street hasn't been a fan of the stock for some time. It fell more than a third from a peak in February through the end of October but was starting to move higher in the last week.

The reorganization may be an attempt to isolate the company's weaker units, such as online mortgage marketplace Lending Tree, which has been hit by the subprime crisis, Forbes.com said.

The announcement comes one week after IAC delivered a weaker than expected third-quarter report -- the company's profits edged down to $71.8 million, or 24 cents a share, from $74.9 million, or 24 cents a share. The Street was expecting profits of 35 cents a share.

Lending Tree's sales plunged 41% in the period.

Kraft to sell Post cereals?

Kraft (KFT, news, msgs) is close to selling its Post cereals unit to Ralcorp for $2.8 billion, The Wall Street Journal reported.

A sale of the division, which includes Raisin Bran and Fruity Pebbles, would be part of CEO Irene Rosenfeld's strategy to get rid of assets that are slow-growing, the paper reported. Sales of Post cereals are down 2% for the first three quarters of the year, according to the Journal, to $699 million.

A deal could be announced in the coming weeks.

Kraft shares were up 1% to $33.15 this afternoon.

Hollywood is on strike

Hollywood writers went on strike early this morning after talks with the Alliance of Motion Picture and Television Producers broke down, and writers hit the picket lines today.

The strike will first affect late-night talk shows, which will go to reruns; sitcom production will be hit next.

• Video: Hollywood writers strike

Writers want more money from DVD sales, as well as a bigger cut from work done on the Internet.

The only stock that seemed to be reacting to the news was News Corp. (NWS, news, msgs), parent of the Fox network. Its shares were down 1.6% to $21.97. Walt Disney (DIS, news, msgs), parent of ABC, and General Electric (GE, news, msgs), parent of NBC Universal, and CBS Corp. (CBS, news, msgs) shares were all down slightly.

Ford reaches deal with UAW

In other union news, Ford Motor (F, news, msgs) said Saturday that it had reached a tentative deal with the United Auto Workers, following outlines established by General Motors (GM, news, msgs) and Chrysler.

"Our bargaining committee came through for our active and retired members," UAW President Ron Gettelfinger said in a statement. "Our team is proud of each and every negotiator because they have encouraged Ford to invest in product and people while addressing the economic needs of our active and retired members."

Details of the deal were not released, and the agreement needs to be approved by a majority of the 54,000 UAW workers.

Shares of Ford fell 3.1% to $8.67.

Short hits from the markets -- 4 p.m. ET

	Mon.	Fri.	Chg.	Month chg.	YTD chg.
Treasurys
13-week Treasury bill	3.580%	3.500%	0.080	-6.28%	-26.71%
5-year Treasury note yield	3.945%	3.917%	0.028	-5.33%	-16.08%
10-year Treasury note yield	4.318%	4.291%	0.027	-3.51%	-8.32%
30-year Treasury bond yield	4.616%	4.595%	0.021	-2.84%	-4.19%
Currencies
U.S. Dollar Index	76.39	76.30	0.09	-0.14%	-8.55%
British pound in dollars	$2.0816	$2.0903	-0.0087	0.04%	6.22%
Dollar in British pounds	£0.4804	£0.4784	0.0020	-0.04%	-5.86%
Euro in dollars	1.4480	1.4526	-0.0046	0.03%	9.70%
Dollar in euros	€ 0.6906	€ 0.6884	0.0022	-0.03%	-8.84%
Dollar in yen	¥114.45	¥114.60	-0.15	-0.83%	-3.84%
Commodities
Gold	$810.80	$808.50	$2.30	1.95%	27.08%
Copper	$3.3020	$3.3250	-$0.023	-4.92%	15.01%
Silver	$14.7850	$14.5990	$0.19	2.40%	12.86%
Crude oil (NYMEX) (per barrel)	$93.98	$95.93	-$1.95	-0.58%	53.94%

By Charley Blaine and Elizabeth Strott