U.S. Stocks Tumble at the Start
Updated from 9:09 a.m. EST
Stocks in New York sagged at the open Friday as traders sought to lock in some of their gains following a sharp rally late Thursday and as credit troubles continued to rock the hurting financial sector.
The
Dow Jones Industrial Average
was losing 128 points to 8707, and the
S&P 500
was giving back 16 points to 896. The
Nasdaq
shed 32 points to 1565.
On Thursday, stocks staged an afternoon comeback off steep morning losses stemming from a high unemployment number and bearish corporate earnings. The Dow ended up more than 500 points.
As the new day's trading began, new signs emerged of the credit troubles that are continuing to rock the ailing financial sector.
The Wall Street Journal
reported that
Citigroup
(C) - Get Citigroup Inc. Report
is gearing up to cut 10,000 jobs and raise interest rates on many credit-card customers.
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Elsewhere among financials,
Dexia SA
is getting set to sell its bond-insurance segment FSA Holding to
Assured Guaranty
(AGO) - Get Assured Guaranty Ltd. Report
. Meanwhile, the
BBC
reported that the
Royal Bank of Scotland
(RBS) - Get Royal Bank of Scotland Group Plc Report
is eliminating 3,000 jobs over the next several weeks.
At a time when financial and consumer firms were facing difficulties offering credit to customers, the
Journal
reported that software behemoth
Microsoft
(MSFT) - Get Microsoft Corporation Report
would offer 0% financing for clients who spend $20,000 to $1 million on its customer-management and accounting software.
Meanwhile,
Federal Reserve
Chairman Ben Bernanke spoke at the European Central Banking Conference. Bernanke said that turmoil in the financial system has warranted international help and that markets remain severely strained. His speech comes as world leaders prepare for a summit in Washington over the next couple of days. The Group of Twenty finance ministers and central bank officials plan to meet to discuss the worldwide financial meltdown.
In the earnings department,
Freddie Mac
undefined
, the mortgage company that has been among those central to the credit crisis, announced a $25.3 billion third-quarter loss.
Retailers were also showing signs of weakness. Department-store operator
Kohl's
(KSS) - Get Kohl's Corporation Report
reported declining profit and cut its full-year guidance.
Nordstrom
(JWN) - Get Nordstrom Inc. Report
also cut its earnings outlook.
J.C. Penney
(JCP) - Get J. C. Penney Company, Inc. Report
said its profit dropped 53% year over year, and the department-store operator guided below analysts' estimates.
As for analyst actions, UBS lowered its rating on European pharmaceutical firm
GlaxoSmithKline
(GSK) - Get GSK plc American Depositary Shares (Each representing two) Report
to neutral from buy, citing valuation.
Shifting to the day's economic data, the Census Bureau reported that October retail sales declined 2.8%, following a 1.3% decline in September. Economists were expecting a 2.1% decrease.
September business inventories and a preliminary November consumer-sentiment survey from the University of Michigan are also on the docket.
Over in the commodities space, crude oil was down $1.58 to $56.66 a barrel. Gold was adding $37.60 to $742.60 an ounce.
Longer-dated U.S. Treasury securities were rising in price. The 10-year was up 1-2/32 to yield 3.72%, and the 30-year was surging 2-7/32, yielding 4.23%. The dollar was rising vs. the euro but weakening against the pound and yen.
Abroad, European exchanges, including the FTSE in London and the DAX in Frankfurt, were working their way higher. The European Union disclosed Friday that the 15 countries that use the euro are in
recession
.
In Asia, Japan's Nikkei and Hong Kong's Hang Seng closed with gains.
