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Updated from 10:55 a.m. EST

Stocks in New York were sagging 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.


Dow Jones Industrial Average

was losing 253 points to 8583, and the

S&P 500

was giving back 30 points to 881. The


shed 60 points to 1536.

As the 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


(C) - Get Citigroup Inc. Report

is gearing up to cut 10,000 jobs and raise interest rates on many credit-card customers.

Elsewhere among financials,

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Dexia SA

is getting set to sell its bond-insurance segment FSA Holding to

Assured Guaranty

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. Meanwhile, the


reported that the

Royal Bank of Scotland

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is eliminating 3,000 jobs over the next several weeks.


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.

Ahead of the meeting, the U.S. government was rolling out several new initiatives to alleviate the crisis. The FDIC released details of a plan to use $24.4 billion to guarantee 2.2 million mortgages, thereby helping some 1.5 million Americans stay in their homes.

The President's Working Group on Financial Markets, meanwhile, offered a plan to improve regulation of derivatives and credit default swaps. The plan included a provision for the Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Trading Commission to share information on the market for credit default swaps.

At a time when financial and consumer firms were facing difficulties offering credit to customers, the


reported that software behemoth


(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.

In the earnings department,

Freddie Mac


, 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


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reported declining profit and cut its full-year guidance.


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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


(GSK) - Get GSK plc American Depositary Shares (Each representing two) Report

to neutral from buy, citing valuation.

Beyond earnings statements, Finnish cell phone firm


(NOK) - Get Nokia Corporation Sponsored American Depositary Shares Report

said it expected industry-wide sales volumes to decline as the economy weakens and currencies remain volatile.

Software maker

Sun Microsystems


was also hunkering down in anticipation of harsh times, announcing that it would cut 5,000 to 6,000 jobs in an effort to cut costs.

Airplane maker


(BA) - Get The Boeing Company Report

, meanwhile, said it would delay production and delivery of the new versions of its 747 freighters. Separately, one of

Boeing's unions

called for a vote on whether to give leadership authority to call a strike.

Shifting to the day's economic data, the Census Bureau reported that October retail sales declined a record 2.8%, following a 1.3% decline in September. Economists were expecting a 2.1% decrease. Excluding autos, sales slumped 2.2%, also a record.

Writing for his blog

, bond market strategist Tony Crescenzi said that much of the declines could be attributed to a nearly 13% decline in sales at gas stations. He said that the data indicate another sharp drop in the personal-spending component GDP after a 3.1% decline in the third quarter.

September business inventories declined 0.2%, showing a greater decrease than economists had expected. The August reading was also revised downward from 0.2% from 0.3%, according to the Census Bureau.

A preliminary November consumer-sentiment survey from the University of Michigan showed an index reading of 57.9, above the consensus estimate and slightly above October's reading of 57.6.

Over in the commodities space, crude oil was down $2.18 to $56.06 a barrel. Gold was adding $38.70 to $743.70 an ounce.

Longer-dated U.S. Treasury securities were rising in price. The 10-year was up 1-8/32 to yield 3.7%, and the 30-year was surging 2-12/32, yielding 4.22%. The dollar was rising vs. the yen but weakening against the euro and pound.

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



In Asia, Japan's Nikkei and Hong Kong's Hang Seng closed with gains.

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