Wall Street drops as credit angst rises

Stocks declined further in a skittish session on Thursday as investors fretted about the likelihood of more credit losses at big financial services companies.

Caution also weighed on the market following an upsurge in volatility that has tended to rock stocks around the close of trading in recent days.

On the credit side, which is one of the dominant issues, we have news of more write-offs, said Joe Liro, economist and market strategist at Stone & McCarthy Research Associates, in Princeton, New Jersey.

We've gotten so much volatility in the last couple of weeks. I think the market is a little tired.

The Dow Jones industrial average was down 33.49 points, or 0.26 percent, at 13,197.52. The Standard & Poor's 500 Index was down 8.68 points, or 0.59 percent, at 1,461.90. The Nasdaq Composite Index was down 17.42 points, or 0.66 percent, at 2,626.90.

Shares of Citigroup Inc., the No. 1 U.S. bank, were the second-biggest drag on the S&P 500, followed by oil company Exxon Mobil Corp, whose stock declined as crude oil prices fell.

Citigroup shares fell 3.3 percent to $34.86 on the New York Stock Exchange, while Exxon shed 1.5 percent to $84.98.

Shares of diversified manufacturer General Electric Co fell 1 percent to $38.62 after it said its short-term bond fund ran into trouble amid losses on asset-backed securities and that all its outside investors have liquidated their holdings.

A report by the Federal Reserve Bank of Philadelphia showing an unexpected surge in its November index of U.S. Mid-Atlantic business conditions briefly lifted the blue-chip Dow average. But the Dow quickly gave up those gains and headed south again.

(Editing by Jan Paschal)