Wall Street's Early-Won Gains Disappear

Updated from 12:00 p.m. EST

Stocks in New York were trading lower after an exuberant open Monday, as buying interest spurred by China's economic stimulus package gave way to worries over a grim near-term future for U.S. companies.

The Dow Jones Industrial Average was losing 110 points to 8833, and the S&P 500 was down 15 points to 916. The Nasdaq was losing 31 points to 1617.

Financial firms were in focus as Monday's session got under way. Troubled insurer American International Group (AIG Quote) received a revamped $150 billion bailout package from the U.S. government and reported a third-quarter loss of $24.47 billion, or $9.05 a share, compared with year-earlier net income of $3.09 billion, or $1.19 a share.

Citigroup (C Quote) is in talks to acquire a bank, according to a report in The Wall Street Journal. Earlier this year, Citi had been a suitor to Wachovia(WB Quote), only to have its offer trumped by Wells Fargo(WFC Quote).

Shares of Goldman Sachs (GS Quote) were incurring heavy losses following a Barclays Capital analyst prediction that the company would lose $2.50 a share in the quarter ending Nov. 30.

In other analyst actions, General Motors (GM Quote) suffered a Deutsche Bank downgrade to sell, and the bank's analysts cut the automaker's share price target to $0 from $4. Barclays analysts moved their price target to $1. On Friday, GM reported a $2.5 billion loss and a rapidly declining cash-flow level, spurring speculation that the company will need government assistance to avoid bankruptcy. GM shares were lately tanking more than 25%.

Wells Fargo (WFC Quote), on the other hand, got a Credit Suisse boost to outperform from neutral.