(By Salman - iStockAnalyst Writer)US stocks finished with substantial weekly losses as investors remained concerned about deepening banking crisis and weak corporate profits.

For the week, Dow was down 317.96 points or 3.7%. S&P fell 40.23 points or 4.5%, while Nasdaq Composite settled with a weekly loss of 42.26 points or 2.7%.

Economic data continued to paint a bleak picture. A release by Census Bureau showed U.S. trade deficit declined 29% to $40.4 billion in December. Imports fell by a record 12% while exports dropped 5.8% in the month, the report said. A release by Department of Commerce on Wednesday showed retail sales tumbled 2.7% in December as consumers continued to cut on their spending in holiday season. Commerce Department said Business inventories fell 0.7% in November, worse than the consensus estimate of 0.5% decline and the biggest drop since November 2001. According to Department of Labor, number of Americans filing first- time claims for unemployment benefits jumped by 54,000 to 524,000 in the week ending Jan. 10. US Department of Labor on Friday said consumer price index dropped 0.7% in December. In a separate release, Department of Labor said U.S. wholesale prices fell 1.9% in December. A Federal Reserve report released on Friday showed industrial production tumbled 2% in December, worse than the consensus estimate of 1.2%. Capacity utilization fell to 73.6% in December from 75.2% in the previous month. The Reuters/University of Michigan Surveys of consumers said its preliminary index reading of confidence for January climbed to 61.9 from December's 60.1.

Meanwhile, US Federal Reserve's Beige Book report showed economic weakness continued into 2009.Manufacturing activity suffered in almost all the districts while labor and housing market worsened further.  

In a speech at The London School of Economics on Tuesday, Fed Chairman Ben Bernanke stressed that fiscal actions in isolation are unlikely to promote a lasting recovery unless accompanied by strong measures to further stabilize and strengthen the financial system. "More capital injections and guarantees may become necessary to ensure stability and the normalization of credit markets,” he said in a statement

Investors were rattled by signs of deepening banking crisis as major US banks reported huge quarterly losses.

Embattled US bank Citigroup Inc. (NYSE: C) posted a fourth quarter loss of $8.29 billion $1.72 a share compared to a loss of $9.8 billion, or $1.99 in the corresponding quarter a year ago. The results for the quarter include a $3.9 billion gain from the sale of a German consumer bank and other results from discontinued operations. Excluding gains the bank’s loss was $2.44 a share, worse than the consensus analyst estimates of $1.12 a share. The bank also said in a statement that it would break up, for management purposes, into two separate units — Citicorp and Citi Holdings.