U.S. Stocks Off to a Bearish Start
10/15/08 - 09:38 AM EDT
Mike Taylor
Updated from 9:2 5 a.m. EDT
Stocks in New York slid at the open Wednesday, as traders took in a broad array of gloomy economic data and assessed a heap of earnings statements, including results from banking titan JPMorgan Chase (JPM Quote - Cramer on JPM - Stock Picks). The Dow Jones Industrial Average was losing 134 points to 9177, and the S&P 500 was lower by 26 points at 972. The Nasdaq stumbled 35 points to 1744. On Tuesday, stocks finished with modest losses, as traders digested the Treasury Department's plan to take a $250 billion equity stake in U.S. banks. The government investment is part of the larger $700 billion Troubled Asset Relief Program to provide assistance to struggling financial firms. Ahead of Wednesday's trading, the Federal Reserve said that Pimco, a unit of Allianz (AZ Quote - Cramer on AZ - Stock Picks), would be the custodian of the government's Commercial Paper Funding Facility, which will buy three-month commercial paper to support money markets. Credit markets continued to loosen as central banks across the globe flooded the markets with liquidity. Three-month dollar Libor, a measure of the rate banks charge one another for large loans, declined 9 basis points to 4.55%, its third straight decline. Several financial firms also released quarterly results, many of which illustrated the deleterious impact of the credit crisis. JPMorgan Chase reported third-quarter profit that slid 84% year over year but nonetheless topped analysts' estimates. The decline in earnings came as JPMorgan saw $3.6 billion in asset writedowns and $640 million in losses related to its purchase of Washington Mutual. Similarly, Wells Fargo (WFC Quote - Cramer on WFC - Stock Picks) said its earnings slid 25% year over year, but the bank beat analyst expectations.
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