This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Dow Falls Below 10,000 on Pay Cut Plan, Downgrade

Stocks in this article: DB YHOO BA

Updated with stock prices.

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.

The 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 Citigroup, 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.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,678.70 +6.10 0.03%
S&P 500 2,057.09 +5.27 0.26%
NASDAQ 4,771.7630 +13.8840 0.29%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs