Stocks Work Off Worst Lows of the Morning

Stocks have shaken off their early lows to trade near the baseline.
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Updated from 1:18 p.m. EST

Stocks on Wall Street have rallied off their morning lows to trade near the baseline as investors sort through another round of earnings reports and a oil-production cut from OPEC Wednesday.

The

Dow Jones Industrial Average

was up 9 points at 8933, and the

S&P 500

gained 2 points to 915. The

Nasdaq

was edging up 3 points to 1593.

Morgan Stanley

(MS) - Get Report

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

Citigroup

(C) - Get Report

garnered headlines Wednesday morning related to its business strategy.

The Wall Street Journal

reported that federal banking regulators are involved in the internal discussions about the bank's strategic direction and are discouraging executives from pursuing certain acquisitions. Separately, the

Financial Times

reports that Citi plans to merge its investment and corporate banking operations in an attempt to break down barriers between its businesses.

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.

As U.S. automakers

General Motors

(GM) - Get Report

,

Ford

(F) - Get Report

and

Chrysler

continued to wait on word from the White House of an

auto-industry rescue plan

, Tokyo-based

Honda

(HMC) - Get Report

cut its profit forecast and announced a 10% pay cut for its managers.

In

analyst actions

,

Apple

(AAPL) - Get Report

was trading lower Wednesday after suffering a downgrade at Oppenheimer to perform. Apple says

Steve Jobs

will not appear at Macworld 2009, and that news again brings the CEO's health into question.

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.

Oil-exporting cartel

OPEC

said Wednesday it will cut its production target by another 2.2 million barrels a day starting in January.

Despite the cut, crude oil was declining $2.18 to $41.42 a barrel. Gold was rising $27 to $869.70 an ounce.

On Tuesday, 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.

The 10-year Treasury was up 1 5/32 to yield 2.13%, while the 30-year note was up 2 15/32 to yield 2.64%. The

dollar

was mixed against other major currencies.

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.