CHARLOTTE, North Carolina (AP) — Citigroup provided a sobering reminder yesterday that the economy is still struggling, reporting that its third-quarter results were weighed down by billions of dollars in failed loans.

The bank reported a $101 million profit before accounting for $288 million in preferred stock dividends and the debt exchange offer that gave the government a 34 percent stake in the bank. Including those items, the New York-based bank reported a $3.24 billion loss.

Citigroup, one of the hardest hit during the credit crisis and recession, said loan losses during the quarter came to $8 billion, down $386 million from nearly $8.4 billion in the second quarter, but a sign that many consumers continue to be overwhelmed.

Citigroup's results are a measure not only of its health after it lost nearly $19 billion in 2008 and needed a $45 billion government bailout, but also the economy's, since the bank caters to consumers.

Banks including Citigroup had warned when second-quarter earnings were released that loan losses would continue into next year. Investors nonetheless reacted negatively to the bank's report of continuing heavy loan losses, and sent Citigroup shares down 27 cents, or 5.4 percent, to $4.73 in midday trading. Other financial company stocks fell sharply in what was overall a modestly lower stock market.

"The bank is not making money, they are losing money in credit cards and mortgages, and it's dragging down the entire bank," said Bart Narter, a senior vice-president at consulting firm Celent.

John Gerspach, Citigroup's chief financial officer, said during a call with media that the view of credit in North America is "somewhat mixed." Citigroup said it added $800 million to its loan loss reserves during the third quarter, down $3.1 billion from the addition it made during the second quarter.