US stocks fell, pushing the decline from this year’s record highs to more than 10 percent, on concern that mounting mortgage losses will lead banks to reduce lending.

Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., the three biggest U.S. banks, declined after Goldman Sachs Group Inc. said HSBC Holdings Plc faces $12 billion in additional writedowns. Fannie Mae and Freddie Mac, the largest U.S. mortgage-finance companies, tumbled after UBS AG said higher credit costs will cause earnings growth to slow. Target Corp. and Macy’s Inc. led retailers lower on concern consumers will spend less on holiday gifts.

The Standard & Poor’s 500 Index dropped 33.48, or 2.3 percent, to 1,407.22, leaving the benchmark down 0.8 percent in 2007. The Dow Jones Industrial Average tumbled 237.44, or 1.8 percent, to 12,743.44, paring its gain for the year to 2.2 percent. The Nasdaq Composite Index lost 55.61, or 2.1 percent, to 2,540.99 and is up 5.2 percent in 2007. Almost six stocks fell for every one that rose on the New York Stock Exchange. [MORE]