Updated from 3:37 p.m. EST
Stocks in New York closed lower Wednesday after disappointing earnings by such companies as
and more bank talk shared the spotlight with better-than-expected economic data.
Dow Jones Industrial Average
was recently down 121.7 points, or 1.5%, at 7957, while the
was off by 6.29 points or 0.8%, at 832.22. The
, was recently lower by 1.25 points, or 0.08%, at 1515.05 after flirting with both sides of the flat line.
Financials, at the forefront of much recent market movement, were running amok, with the KBW Bank index shedding 1.2% before returning to positive territory.
Bank of America
down nearly 10% earlier in the day, was recently paring losses, with
Royal Bank of Scotland
doing the same.
held up in positive territory.
The market is waiting to see what will come out of Washington, said Jeff Saut, chief investment strategist at Raymond James Financial, referring to anticipated word on the stimulus package and the next chapter in the bank relief effort. The stimulus will continue to be the "carrot in front of the horse" until more details emerge, likely this weekend or early next week, he said.
In the meantime, earnings releases continue to give a bleak picture of the economy.
and Disney disappointed late Tuesday, with the former reporting
a fourth-quarter loss of $16 billion
on massive writedowns in its cable, publishing and AOL assets, and the latter citing declining DVD, television and theme park income as reasons for a 32% decline in profits.
Leading the losses on the Dow, Kraft said
its fourth-quarter profit fell 72%
on costs related to a restructuring program.
was trading nearly 7% lower after it said it expects second-quarter earnings to be "substantially below" analyst forecasts in light of the weaker economy.
In a case of "more of the same,"
said it expects to record its first yearly net loss in six years in March and will cut 15,000 jobs globally to adjust to the economic downturn. Those numbers add to a slew of layoff announcements earlier in the week.
Helping to put the number of layoffs in perspective, on Wednesday morning, ADP Employer Services said private employers eliminated 522,000 jobs in January vs. 659,000 jobs lost in December. Economists had expected a median 530,000 private sector job cuts in January, according to a
ADP's data will again help prepare the financial markets for a weak jobs report, wrote Tony Crescenzi, chief bond analyst at Miller Tabak, on his RealMoney.com blog.
"It is important to keep in mind that the consensus for a 540k decline is far more than in the summer when expectations generally were for monthly decreases of about 75k per month," Crescenzi writes. "This stark change clearly shows that the preparedness for monthly job losses is unusually high."
While projections for job reductions in January were lessened from December, cuts
in January shot up 45% to 241,749 month over month. Some relief for Wall Street: The financial sector had its lowest one-month total of announced job cuts, 1,458, since 2005, down from 39,604 in December.
But keep in mind, last month ADP Employment Service forecast that private-sector employment fell by 693,000 in December, far overshooting the subsequent report by the labor department of 524,000 job losses. That said, ADP substantially underestimated job loss figures in November.
Some of today's economic news offered a glimmer of hope, as the U.S. service sector shrank less severely than expected in January, with the Institute for Supply Management's nonmanufacturing index registered at 42.9 in January up from 40.1 in December, and compared to expectations for 39.
Also, the Mortgage Bankers Association's Market Composite Index, a measure of mortgage loan application volume, increased 8.6% on a seasonally adjusted basis to 795.4, for the week ended Jan. 30 from the week prior.
And lastly, the
weekly Consumer Confidence Index lessened to negative 52 from negative 54 a week prior, a twice-reached record low.
Trying to rebuild confidence in the financial system, Treasury Secretary Tim Geithner and President Obama held a press conference to announce
a limit on executive pay , to $500,000 a year, for those executives employed by government-assisted financial institutions. The government has been cracking down on exuberant salaries and bonuses as well as spending in institutions that are taking taxpayer aid.
Taking its own steps to garner confidence, and perhaps in response to public reaction,
for employees after it received criticism that it was misusing $25 billion in taxpayer bailout money.
Taking a look at commodities, crude oil fell 46 cents to settle at $40.32 on Wednesday. Gold gained $9.70 to settle at $902.20.
Longer-dated Treasuries were recently mixed; the 10-year note was giving up 4/32 to yield 2.9%, the 30-year was rising 12/32, yielding 3.7%.
The dollar was recently stronger against the euro and yen, and weaker against the pound.
Taking a look overseas, in Europe, the FTSE in London and the DAX in Frankfurt cleared the day in positive territory. In Asia, Japan's Nikkei and Hong Kong's Hang Seng also registered gains in their session.