Credit Worries Wallop Stocks

However, it wasn't all bad, despite the pullback. AT&T (T Quote - Cramer on T - Stock Picks) was better than expected on the profit line, as were Lockheed Martin (LMT Quote - Cramer on LMT - Stock Picks) and CME (CME Quote - Cramer on CME - Stock Picks). While AT&T and CME declined, Lockheed Martin shot higher by 3.6% to $103.09.

British oil major BP (BP Quote - Cramer on BP - Stock Picks) said earnings rose 1.5%, and Eli Lilly (LLY Quote - Cramer on LLY - Stock Picks) exceeded estimates and lifted its projections. BP dipped 2.9% to $72.30, while Eli Lilly finished the day unchanged at $57.17.

Pepsi (PEP Quote - Cramer on PEP - Stock Picks), EMC (EMC Quote - Cramer on EMC - Stock Picks) and McGraw-Hill (MHP Quote - Cramer on MHP - Stock Picks) were also better than expected, as were UAL (UAUA Quote - Cramer on UAUA - Stock Picks) and Northrop Grumman (NOC Quote - Cramer on NOC - Stock Picks). UAL was the only name in the group to finish with gains, ending higher by 4.2% for the session.

Dow stock McDonald's (MCD Quote - Cramer on MCD - Stock Picks) posted only its second-ever quarterly loss. Excluding items, the restaurant chain matched the forecast for a profit of 71 cents a share. Shares slipped 95 cents, or 1.8%, to finish at $51.55.

On the research front, Citigroup upgraded Wachovia (WB Quote - Cramer on WB - Stock Picks) to buy from hold, citing valuation. Still, shares closed lower by 41 cents, or 0.8%, to $48.41.

Among downgrades, Jefferies cut both United Rentals (URI Quote - Cramer on URI - Stock Picks) and GlobalSantaFe (GSF Quote - Cramer on GSF - Stock Picks) to hold from buy. United Rentals was off by 56 cents, or 1.7%, to $32.42. GlobalSantaFe ended down 73 cents, or 0.9%, to $77.60.

On Monday, both stocks made M&A headlines and gave the major averages a boost. Transocean (RIG Quote - Cramer on RIG - Stock Picks) said it will combine with GlobalSantaFe to form a driller with an enterprise value of $53 billion. Private-equity firm Cerberus said it will acquire United Rentals for $2.83 billion.

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