Nov. 20 (Bloomberg) -- Citigroup Inc. fell 26 percent in New York trading, after losing almost a quarter of its value yesterday, as concern intensified that the U.S. recession will generate losses and weaken demand for financial services.

Citi, down for eight of the past nine trading days, declined $1.69 to a 15-year low of $4.71 on the New York Stock Exchange at 4:08 p.m. The stock, which fell as low as $4.39, slumped even after Saudi billionaire Prince Alwaleed bin Talal said he would boost his stake in the New York-based bank.

Buffeted by four straight quarterly losses, Citigroup has raised about $75 billion since December by selling assets and equity stakes, including a $25 billion injection from the U.S. Treasury. Alwaleed would have to spend about $350 million to boost his stake to 5 percent from 4 percent, based on yesterday's closing price.

``They're long-term investors, and that's about the only kind of person putting money in here these days,'' said Ralph Shive, chief investment officer at 1st Source Corp. Investment Advisors in South Bend, Indiana, which manages $3 billion. ``I suspect there's more to go in that this is the center of the hurricane.''

Chief Executive Officer Vikram Pandit said this week Citigroup will cut 52,000 jobs in the next year, double the target announced in October, as loan losses surge and the economy shrinks. JPMorgan Chase & Co., the largest U.S. bank, plans to fire about 10 percent of its investment-banking staff, or about 3,000 people, a person familiar with the bank said today. Its shares dropped $5.09, or 18 percent, to $23.38.

Recession Indicators

Government data show the recession may be prolonged, including a report today from the Conference Board that the index of leading U.S. economic indicators fell in October for the third time in four months. The index points to the direction of the economy over the next three to six months. A separate report showed the number of Americans filing for unemployment benefits approached a 26-year high.

``Arguably, there are values in the financial sector, but because there's no confidence in the market, investors are reluctant to buy,'' said Walter ``Bucky'' Hellwig, who manages $30 billion at Morgan Asset Management in Birmingham, Alabama. ``People just don't want to own anything with risk.''

Citigroup has lost about $20 billion in the past four quarters as bad loans increased and demand for banking services declined. Analysts surveyed by Bloomberg expect a $673 million deficit for the fourth-quarter.

U.S. Aid

The world's biggest finance companies have taken almost $1 trillion in writedowns and losses since the credit markets seized up last year. The U.S. has injected more than $200 billion into the top U.S. banks and insurance companies to shore up their finances, and analyst Paul Miller at FBR Capital Markets in Arlington, Virginia, said as much as $1 trillion may be needed.

``People haven't been rewarded for investing in financials this year and so people are just frustrated and dumping these things,'' said Benjamin Wallace, an analyst at Grimes & Co. in Westborough, Massachusetts, which has about $600 million under management. ``As much as we'd like to go back and look at them, there's still uncertainty about their profitability and their exposures.''

Treasury Secretary Henry Paulson this month scrapped plans to use government funds to buy troubled assets in favor of using the money to buy stakes in banks and relieve pressure on consumer credit. The Treasury chief said Nov. 18 in testimony to the House Financial Services Committee that capital injections and a ``modest'' contribution to a Federal Reserve program for consumer finance are the best ways to use bailout money. Earlier in the week, he said markets may be under stress for ``months.''

Jobs, Cars

The U.S. unemployment rate rose to 6.5 percent in October, the highest since 1994, as companies slashed payrolls, the Labor Department said this month. Auto sales plunged 32 percent, manufacturing contracted at its fastest pace in 26 years and consumer confidence fell by the most on record during the month.

``We think the economy could be worse than the capital- markets crisis,'' JPMorgan Chief Executive Officer Jamie Dimon said Nov. 12 at a conference. ``You really need to separate them because they have completely different effects on our businesses and on most businesses.''

To contact the reporter on this story: Steve Dickson in New York at sdickson1@bloomberg.net.

Last Updated: November 20, 2008 16:22 EST