[R]12:00PM New York – U.S. stocks declined after Bhutto in Pakistan was killed and November durable goods orders declined.[/R]

U.S. stocks declined in the first hour of trading on weaker than expected durable goods order data, weekly jobless report, and death of Bhutto in Pakistan from suicide attack.

Dow Jones Industrial Average dropped 102.75 to 13,448.94, Nasdaq declined 2,704.77, S&P 500 fell 10.08 to 1,487.58.

Pakistan entered into another chaotic period with the killing of the only viable candidate in the next election scheduled on January 8th. Benazir Bhutto, former prime minister, and a leading contender in the next election, was killed by a suicide attacker. The barbaric attack was carried out in Rawalpindi after she had finished addressing a campaign rally.

Ms Bhutto, 54 years was rushed to hospital but died from multiple injuries from gun attack in head and neck. At least 20 other people have been killed in the attack.

The killing is expected to lash out a wave of anti-government sentiment for not protecting the leader of Pakistan’s Peoples Party and perception that President Musharraf is acting in the interest of America and not in the interest of the people of Pakistan.

The Commerce Department reported that November durable goods orders rose 1% to a seasonally adjusted $214.6 billion. The orders fell 0.7% excluding transportation orders.

Initial claims of jobless benefits rose at the end of the last week by 1,000 to 349,000 and total number of people claiming benefits in the period rose to 2.713 million according to the Department of Labor.

U.S. commercial crude oil inventories dropped by 3.3 million barrels compared to the previous week. At 293.6 million barrels, U.S. crude oil inventories are in the lower half of the average range for this time of year. Total motor gasoline inventories increased by 0.7 million barrels last week, but are in the lower half of the average range. Finished gasoline inventories fell last week while gasoline blending components inventories increased during this same period.

Oil jumped $1.46 to $97.43 on the report.

SLM Corp (SLM: chart) fell 6% or $1.552 to $20.06 after it said that it plans to issue common and preferred stocks worth $2.5 billion to cover the stock buyback contract.

Banks declined after the durable goods orders report and bearish report from Goldman Sachs on banks.

Goldman issued a research report with an estimate of $35 billion in write-downs in the fourth quarter largely related to CDO debts and weakening values of the mortgage securities.

William Tanona nearly doubled his estimate of losses at Citi, Merrill, and JP Morgan. His new estimate for losses at Citigroup in the fourth quarter is near $18.7 billion, for Merrill Lynch is $11.5 billion, and for JP Morgan of $1.7 billion.

JP Morgan Chase (JPM: chart) fell 45 cents to $44.50, Citigroup (C: chart) fell 71 cents to $29.75, and Wachovia Bank (WB: chart) dropped 57 cents to $38.50.

Tanona also hinted that Citigroup may need another capital infusion between $5 billion and $10 billion and may have to cut its dividend by 40%.

[R]5:00AM New York, 7:00PM Tokyo-Housing starts fell to 27% in November.[/R]

In Tokyo trading Nikkei 225 shed 0.57% or 88.85 to 15,564.69, while the broader Topix Index plunged 8.53 to 1,499.94.

In the first section of the Tokyo Stock Exchange 6.9 billion shares valued at 723 billion yen were traded and in the in the second section 284 million shares worth 4.8 billion yen changed hands.

Of the Nikkei 225 stocks 56 gained, 158 declined, and 11 were unchanged. Clarion Company Limited led advancers with a rise of 5.15% followed by Tokyu Corporation firming 3.63%.