Updated from 1:39 p.m. EST
U.S. stocks were down in the dumps Wednesday afternoon as traders took in some bearish corporate news and dreary economic data, while sizing up their prospects following
victory in the presidential election.
Dow Jones Industrial Average
was shedding 330 points to 9295, and the
was lower by 33 points at 972. The
dropped 63 points to 1717.
Several bits of data about the broad economy painted a grim picture. Automatic Data Processing reported that the U.S. lost 157,000 jobs in October. Economists had forecast a loss of 100,000 jobs. The ADP figure for September was revised to a loss of 26,000 jobs from an initial read of 8,000.
Writing for his
blog, Tony Crescenzi, chief bond market strategist for Miller Tabak, said that ADP's employment readings have in the past few months registered fewer job losses than the Bureau of Labor Statistics, which is set to report its October employment data on Friday.
"These data will help further prepare the financial markets for the possibility of a weak jobs report," he wrote. He said the next step for the market is to assess the extent and duration of the economic downturn.
The Institute for Supply Management said its services index showed a reading of 44.4 for October, down from 50.2 in September. Economists were looking for the index to register at 47.
"We're continuing to go downhill in terms of the
economic cycle. Now that doesn't mean that the market is going to go straight down," said Paul Mendelsohn, chief investment strategist at Windham Financial. "We're seeing a bear-market rally here, and it's just a matter of how far they can take this," he said.
Mendelsohn also said that he's seeing a rebalancing of asset allocation as investors have begun buying what they see as underpriced stock. He says that a Dow level of 9650 is a resistance level, and stocks will have to consolidate before they can go any higher.
Several corporate headlines were detracting from buying sentiment. Aircraft maker
announced that its 787 Dreamliner program was suffering delays because it needs to replace improperly attached fasteners on the new jets.
In the technology space, Internet company
announced on its blog that it would end an advertising agreement with fellow Web portal
. Google cited government regulators' and some advertisers' concern about the agreement as reason for the termination.
, cut its quarterly dividend 75%, citing a goal of maintaining a strong financial position.
Media reports also indicated pharmaceutical company
would cut nearly 1,800 sales jobs as it restructures its operations.
On the merger front, specialty chemicals maker
announced that its shareholders approved a merger deal with
Another day brought additional earnings statements.
reported a slight drop in third-quarter earnings and reduced its 2008 earnings forecasts because of additional restructuring it expects to incur.
reported a third-quarter loss that was substantially wider than a year ago. A bit later Wednesday, fellow insurer
is expected to report.
announced earnings that increased 29% and said it would reduce production for the fourth quarter thanks to an economic downturn.
Meanwhile, solar panel maker
reduced its fourth-quarter and 2009 earnings figures, saying a strengthening dollar vs. the euro would hurt its results.
Among financial firms,
, jointly owned by
, reported a widened third-quarter loss due to setbacks in its mortgage business.
As for commodities, crude oil was losing $5.25 to $65.28 a barrel. The Energy Information Administration reported that crude-oil inventories for last week were unchanged, whereas economists were looking for an increase of 1.1 million barrels.
Gold shed $14.90 to settle at $742.40 an ounce.
Longer-dated U.S. Treasury securities were rising in price. The 10-year was up 10/32, yielding 3.69%, and the 30-year was gaining 22/32 to yield 4.15%. The dollar was falling vs. its major foreign competitors.
Credit markets were relaxing. Three-month dollar Libor, a measure of the rate banks charge one another for large loans, declined 20 basis points to 2.51%. Overnight Libor fell 6 basis points to 0.32%.
Overseas, European exchanges, including the FTSE in London and the DAX in Frankfurt, were mostly trading lower. In
, Japan's Nikkei and Hong Kong's Hang Seng closed on the upside.