Stocks Sink on Profit-Taking

Tuesday's rally gives way to early losses Wednesday as Morgan Stanley posts a wider-than-expected loss.
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Stocks on Wall Street opened Wednesday to profit-taking as investor enthusiasm over the

Federal Reserve's

historic rate cut the day before gave way to investor unease over lingering economic worries.

The

Dow Jones Industrial Average

was losing 106 points at 8817, and the

S&P 500

fell 13.8 points to 899. The

Nasdaq

was giving up 23.7 points to 1566.

On Tuesday, the Dow rallied more than 4% and the S&P and Nasdaq surged more than 5% after the Fed cut its federal funds rate target to a range of 0% to 0.25%, a steep cut that surprised Wall Street and set a historic low for the key rate.

Morgan Stanley

(MS) - Get Report

helped set the tone Wednesday, posting a wider-than-expected loss for the fiscal fourth quarter ahead of the opening bell. The bank holding company said it lost $2.37 billion, or $2.34 a share. Analysts had forecast a loss of 34 cents a share.

ConAgra Foods

(CAG) - Get Report

recorded in-line second-quarter profit of $168.1 million, or 37 cents a share, which marks a 31% slump from a year ago when the maker of Chef Boyardee and other brands posted $244.8 million, or 50 cents a share.

General Mills

(GIS) - Get Report

posted second-quarter earnings of $378.2 million, or $1.09 a share, which was down from the $390.5 million, or $1.14 a share, the cereal maker recorded a year earlier.

Citing weakening demand for its hard drives,

Western Digital

(WDC) - Get Report

will cut 2,500 jobs, or about 5%, of its global workforce, as well as executive pay.

Meanwhile, the fallout from the

Bernard Madoff

scandal continues to play out. Late Tuesday,

Securities and Exchange Commission

Chairman Christopher Cox demanded an internal investigation of why regulators from his agency failed for a decade to investigate the Wall Street money manager, who last week was charged with running an elaborate and far-reaching Ponzi scheme that lost an estimated $50 billion for investors. A formal investigation of complaints would have forced Madoff to provide documentation years ago.

The 10-year Treasury was up 1 23/32 to yield 2.08%, while the 30-year note was up 3 22/32 to yield 2.59%. The dollar was mixed against other major currencies.

Crude oil was down 61 cents at $42.99 a barrel, while gold was rising $25.20 to $867.90 an ounce.

In Asia, Japan's Nikkei and Hong Kong's Hang Seng edged higher. In Europe, Germany's DAX and France's CAC-40 edged lower

Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. AP contributed to this report.