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Updated from 3:25 p.m. EST

Stocks in New York lost their early-morning mojo and finished with losses 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.


Dow Jones Industrial Average

, up as much as 215 points early on, ended the day down 73.27 points, or 0.8%, at 8870.54. The

S&P 500

lost 11.78 points, or 1.3%, to 919.21, and the


shed 30.66 points, or 1.9%, to 1616.74.

Financial firms were in focus as Monday's session got under way. Troubled insurer

American International Group

(AIG) - Get American International Group Inc. Report

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. AIG stock gained 8.1% to $2.28.

Other financial stocks had a rougher go of it.


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TheStreet Recommends

(C) - Get Citigroup Inc. Report

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


(WB) - Get Weibo Corporation Report

, only to have its offer trumped by

Wells Fargo

(WFC) - Get Wells Fargo & Company Report


Citi shares slipped 5.2% to $11.21, Wachovia edged down 1.6% to $5.48 and Wells Fargo gave back 3% to $28.62.

Bank of America

(BAC) - Get Bank of America Corporation Report

, meanwhile, said in a regulatory filing that it was taking on $16.6 billion in

Countrywide Financial's

debt. BofA had acquired Countrywide on July 1 for $4 billion. Shares skidded 4.9% to $19.48.

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Shares of

Goldman Sachs

(GS) - Get Goldman Sachs Group Inc. (The) Report

fell 8.5% to $71.21 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) - Get General Motors Company Report

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. Shares plummeted 23% to $3.36.

Credit markets remained a concern, as the Group of 20 finance ministers and central governors on Sunday released a statement calling for additional interest-rate cuts from central banks.

Three-month dollar Libor, a measure of the rates banks charge one another for large loans, dropped 6 basis points to 2.24%. Overnight Libor edged up 2 basis points to 0.35%.

"We're going to look back in three months and six months and realize the federal government took extraordinary amounts of action," said Gary Flam, portfolio manager at Bel Air Investment Advisors. He said that taken all together, the

Federal Reserve's

interest-rate cuts and other government actions were significant in restoring confidence, but "this financial crisis does have economic implications. People, businesses, governments going forward are going to have reduced leverage." He said he does not see a swift recovery and expects the economy to continue to stagnate into the first and second quarters of 2009.

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Statements from several firms reflected the tough economic environment. Electronics retailer

Circuit City

(CC) - Get Chemours Company (The) Report

filed for Chapter 11 bankruptcy protection Monday. Shares were in free fall, down 56% to 11 cents.

Meanwhile, shipping company

Deutsche Post

said it would cut 9,500 jobs and reduce U.S. operations of its

DHL Express


On the


side, financial conglomerate

Berkshire Hathaway

(BRK.A) - Get Berkshire Hathaway Inc. Report

announced a 77% decline in third-quarter profit that owed in part to unrealized losses on derivatives and other securities. The stock tumbled 2.7% to $109,999.

Telecom firm

Nortel Networks

( NT) announced a third-quarter loss and said it would cut its headcount by 1,300, sending shares down 19% to 95 cents.

Meanwhile, mortgage company

Fannie Mae

( FNM) reported a $29 billion loss for the third quarter, and its stock ticked down 3% to 72 cents.

Meat products producer

Tyson Foods

(TSN) - Get Tyson Foods Inc. Report

announced an increase in third-quarter earnings, and fast-food concern


(MCD) - Get McDonald's Corporation Report

said global same-store sales increased 8.2% in October. Tyson lost 10% to $6.69, while McDonald's added 1.8% to $56.48.

Beyond earnings, energy company


(NRG) - Get NRG Energy Inc. Report

late Sunday rebuffed a $6.08 billion buyout offer from


(EXC) - Get Exelon Corporation Report

. NRG dropped 5.5% to $22.56, and Exelon slipped 6.2% to $50.49.

Agricultural firm


(BG) - Get Bunge Limited Report

formally did away with plans for a $4.8 billion merger with

Corn Products International

( CPO). Bunge shares were unchanged at $44.22, and Corn Products edged down 1.3% to $24.32.

Asian markets

closed higher Monday following China's announcement of a $586 billion stimulus package to bolster consumer and business confidence. European indices, including the FTSE in London and the DAX in Frankfurt, also were marking gains.

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Although China's initiative to bolster its economy has given the U.S. market a boost in early trading, such a decision calls into question the theory that China could continue to grow even as other economies suffer a downturn, said Phil Flynn, vice president and senior market analyst at Alaron Trading. "A few months ago, the biggest concern about China and the government was getting the economy to slow down." He said that the stimulus package "probably signals that things in China are probably a lot worse than people have feared."

Flynn said that the market was behaving as though China's stimulus package was a short-term bullish event, but he also said that the infrastructure buildout undertaken by the package is a longer-term plan, and the news is actually bearish for the short term. "I think what's going to happen is that the excitement is probably going to wear off," he said.

Looking at commodities, crude oil added $1.37 to settle at $62.41 a barrel. Gold rose $12.30 to close at $746.50 an ounce.

Longer-dated U.S. Treasury securities were rising in price. The 10-year note was adding 13/32 to yield 3.74%, and the 30-year was up 1-13/32, yielding 4.19%. The dollar was gaining on the euro but falling vs. the pound and yen.