U.S. Stocks Open Down

Wall Street trends lower out of the opening gate as financial stocks weigh heavily on the indices. Fannie Mae, Freddie Mac, UBS and Merrill all open to the downside.
By Sarina Penn ,

Updated from 8:13 a.m. EDT

Stocks in New York were sinking at the open Tuesday as traders dealt with disappointing results from

Fannie Mae

(FNM)

and another record day for oil prices.

The

Dow Jones Industrial Average

was down 74 points to 12,896, and the

S&P 500

gave up 7 points to 1401. The

Nasdaq Composite

slipped 11 points to 2453.

Fannie Mae tumbled 6.9% after the mortgage buyer said it lost $2.51 billion, or $2.57 a share, in the latest quarter, after payment of preferred dividends. The government-sponsored firm also said it will cut its dividend and raise $6 billion through share offerings.

Freddie Mac

(FRE)

was off 5.4%.

Merrill Lynch

(MER)

was another drag, slipping 2.5% on word that the government has asked for information about auction-rate securities and the failure of some recent auctions.

Elsewhere among financials,

UBS

(UBS) - Get Report

said it took a loss of $10.97 billion in its most recent quarter after a $19 billion writedown. UBS also said it would shrink its workforce by 5,500 workers by the middle of next year, including cutting up to 2,600 employees in the investment banking division, and sell $15 billion in troubled mortgage assets to

BlackRock

(BLK) - Get Report

. Shares were off 3.2% in the premarket.

Last time out, equity measures saw pressure from crude oil, which got past the $120 mark for the first time ever, as well as the evident disintegration of a proposed merger between

Microsoft

(MSFT) - Get Report

and

Yahoo!

(YHOO)

.

At the end of the day, the Dow lost 87 points to 12,970, and the S&P 500 surrendered 6 points to 1407. The Nasdaq sank 13 points to 2464.

As the new day began, oil touched yet another all-time high, $120.93, before stepping back to a 24-cent gain at $120.39. Gold futures, meanwhile, added $3.50 to $877.60. The U.S. dollar firmed by 0.3% against the euro to $1.5536 while losing 0.4% to the yen at 104.32.

Dow component

Merck

(MRK) - Get Report

announced plans to lay off 1,200 workers, a decision that comes a few days after the Food and Drug Administration rejected the company's new cholesterol drug. Shares were off fractionally at $38.91.

Treasury prices were rising. The 10-year note was up 16/32 in price to yield 3.81%, and the 30-year bond jumped 25/32 in price, yielding 4.55%.

Overseas markets were mixed. Hong Kong's Hang Seng ticked up 0.3% overnight. In Europe, London's FTSE 100, Germany's Xetra Dax, and the Paris Cac were all losing 0.8% or more.

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