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NEW YORK (
TheStreet) -- Stocks sold off late Wednesday after Wall Street learned that Washington would restrict
executive pay at companies receiving bailout funds and Wells Fargo was downgraded.
Dow Jones Industrial Average fell 92.12 points, or 0.9%, to 9949.36, while the
S&P 500 shed 9.66 points, or 0.9%, to 1081.40. The
Nasdaq gave up 12.74 points, or 0.6%, to 2150.73.
The Treasury Department
is planning to cut pay in half, on average, compared with 2008 for the for the best-paid executives at
Bank of America(BAC),
American International Group(AIG), General Motors, Chrysler and the two automakers' financing arms, the
New York Times reported Wednesday. Salaries, excluding bonuses and retirement packages, are set to be chopped by 90%.
Stocks gave up gains late Wednesday afternoon after analyst Dick Bove lowered his rating for
Wells Fargo(WFC - Get Report) to sell. The bank topped estimates with its quarterly report earlier in the day, fell steeply after the downgrade, ultimately losing 5.1%.
"The bottom line is overall we've had a weak reaction to earnings, and at the same time, the option expiration was last week -- this is the first week of a five week options cycle -- and historically that's more bearish," says Ryan Detrick, senior technical strategist for Schaeffer's Investment Research. "So a little bit of selling this week isn't a shock."
Yahoo!(YHOO - Get Report) and
Morgan Stanley(YHOO - Get Report) were still 2.9% and 4.8% higher, respectively, after after strong quarterly reports.
But other reports -- from the likes of Wells Fargo and
Deutsche Bank(DB - Get Report), for instance -- continued to top estimates, but failed to impress.
"We knew that [the majority of companies] were going to beat because we had no warnings from companies going into the quarter ... and then the earliest leaders - JP Morgan and Intel, for example - came out with just blow away numbers," says Marc Pado, chief market strategist at Cantor Fitzgerald.