Stocks End Negative Day Narrowly Mixed

Elsewhere in the financial sector, The Wall Street Journal reported that large Chinese banks are reducing their investments in mortgage debt issued by Fannie Mae (FNM Quote) and Freddie Mac (FRE Quote).

Following the report, Fannie successfully issued $2 billion in short-term bills at an interest rate lower than a week ago, offering some reassurance to investors. Fannie ended the day down 1.5% at $7.32, while Freddie climbed 3.9% to $5.38.

Worries for financial firms were not confined to the U.S. The Royal Bank of Scotland said that U.K. bank Barclays (BCS Quote) may have to raise $13.3 billion in capital to attain liquidity levels on par with competitors. Barclays lost 2% to $25.25.

Wachovia (WB Quote) named Tom McManus, former chief investment strategist at Banc of America Securities, as chief investment officer. Shares added 3.2% to $17.18.

Back in merger news, beverage maker Coca-Cola (KO Quote) offered to buy China Huijan Jice for about $2.5 billion. The stock slipped 0.6% to $51.66.

In earnings, machinery manufacturer Joy Global (JOYG Quote) reported fiscal third-quarter earnings that beat analyst estimates and raised its 2008 forecast. Shares fell 19% to $53.05, however, after a Goldman Sachs analyst said that the company's results were disappointing.

Office-supplies retailer Staples (SPLS Quote) reported that second-quarter earnings dropped 16% year over year. The stock tacked on 1.7% to $25.18.

In the realm of commodities, crude oil declined 36 cents to settle at $109.35. Gold was down $2.30 at $808.20.

Shifting to economic data, employment consultancy Challenger, Gray & Christmas announced that employers announced job cuts totaling 377,325 for the summer, a 30% increase over spring layoff numbers.