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U.S. Stocks Abandon Rally Mode

Stocks in New York open Wednesday lower as the Senate prepares to vote on its own version of a rescue plan for the financial sector.
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Updated from 9:37 a.m. EDT

U.S. stocks were falling early Wednesday as traders awaited the outcome of a Senate vote on the Bush administration's rescue package for the financial system.


Dow Jones Industrial Average

was down 95 points to 10,755, and the

S&P 500

dropped 13 to 1154. The


gave back 20 points to 2072.

During Tuesday's session, stocks posted large gains, partially recovering from a sharp selloff Monday. As the new day got underway, investors were still waiting for news on a $700 billion financial-sector


proposal rejected by the House of Representatives on Monday.

The revised bill before the Senate included a temporary increase in government insurance on bank deposits to $250,000 from $100,000. The bill also extends existing tax breaks for individuals and businesses for two years.

According to reports by

The Wall Street Journal



, former



CEO Maurice Greenberg requested the opportunity to bid on the insurance company's assets. AIG, which has taken out an emergency bridge loan from the government as part of its effort to raise capital, was reportedly contemplating the sale of various assets to stave off a government takeover.



reported that Swiss bank



may be cutting as many as 1,900 investment banking, equities and fixed-income jobs. UBS announced earlier this year that it would split its business after incurring large subprime-related writedowns.

Meanwhile, mining concern

BHP Billiton


gained approval from the Australian government to buy

Rio Tinto



In analyst actions,

Exxon Mobil


caught a Barclays Capital upgrade to overweight from equal weight. Barclays said that the company's market value per barrel of oil has fallen despite an increase in oil prices.

As for economic data, Automatic Data Processing's September

private nonfarm employment

figures showed a loss of 8,000 jobs, far better than economists' estimates for a decline of 50,000. ADP revised its August lost-jobs count to 37,000 from a previous read of 33,000.

Also on the economic docket, the Commerce Department's will report on August construction spending. The Institute for Supply Management is expected to roll out its manufacturing index for September.

Longer-term U.S. Treasuries were rising in price. The 10-year note was up 24/32 to yield 3.73%, and the 30-year was gaining 1-21/32, to yield 4.21%. The dollar was stronger vs. the euro and pound, but weakening against the yen.

Over in commodities, crude oil was losing $1.91 to $98.73. The Energy Information Administration is set to release its oil inventory numbers for the week ended Sept. 27. Gold was falling $1.70 to $879.10.

In Europe, exchanges were mixed. London's FTSE was edging higher, while Frankfurt's DAX was trading downward. The Nikkei in Japan closed with gains. Markets in Hong Kong, China and Singapore were closed for a holiday.