U.S. Stocks Off to a Bearish Start
Updated from 9:2 5 a.m. EDT
Stocks in New York slid at the open Wednesday, as traders took in a broad array of gloomy economic data and assessed a heap of earnings statements, including results from banking titan
JPMorgan Chase
(JPM) - Get Report
.
The
Dow Jones Industrial Average
was losing 134 points to 9177, and the
S&P 500
was lower by 26 points at 972. The
Nasdaq
stumbled 35 points to 1744.
On Tuesday, stocks finished with modest losses, as traders digested the Treasury Department's plan to take a $250 billion
. The government investment is part of the larger $700 billion Troubled Asset Relief Program to provide assistance to struggling financial firms.
Ahead of Wednesday's trading, the
Federal Reserve
said that
Pimco
, a unit of
Allianz
(AZ)
, would be the custodian of the government's Commercial Paper Funding Facility, which will buy three-month commercial paper to support money markets.
Credit markets continued to loosen as central banks across the globe flooded the markets with liquidity. Three-month dollar Libor, a measure of the rate banks charge one another for large loans, declined 9 basis points to 4.55%, its third straight decline.
Several financial firms also released quarterly results, many of which illustrated the deleterious impact of the credit crisis.
reported third-quarter profit that slid 84% year over year but nonetheless topped analysts' estimates. The decline in earnings came as JPMorgan saw $3.6 billion in asset writedowns and $640 million in losses related to its purchase of
Washington Mutual
.
Similarly,
(WFC) - Get Report
said its earnings slid 25% year over year, but the bank beat analyst expectations.
(STT) - Get Report
, on the other hand, reported an increase in third-quarter income.
Outside the financials, pharmaceutical concern
Abbott Labs
(ABT) - Get Report
said its earnings rose 51% year over year and raised its full-year earnings forecast.
Beverage firm
(KO) - Get Report
said its profit increased 14% year over year and trumped the Street's expectations.
(DAL) - Get Report
, meanwhile, swung to a third-quarter loss that the company attributed to rising fuel costs.
As for technology shares, chipmaker
(INTC) - Get Report
announced a 12% increase in third-quarter profit, but said its future performance was unclear.
Looking at the day's economic data, reports indicated that consumers were tightening their belts as core prices increased. The Census Bureau reported that retail sales were 1.2% lower in September, worse than a 0.4% decline in August. Economists had anticipated a drop of 0.7%. The decline in retail sales was the largest the U.S. has seen in three years. Excluding autos, the number fell 0.6%, a narrower decline than the 0.9% drop in August.
On the price side, the Bureau of Labor Statistics said that, as expected, its producer price index declined 0.4% in September, compared with a 0.9% decrease in August. However, the core reading, which subtracts food and energy, saw a 0.4% uptick, more than the 0.2% consensus estimate and up from 0.2% in August.
The New York Fed's manufacturing index for October fell to a record low of -24.6, down from -7.4 in September and much lower than -10 in August.
Later, investors will take in the Energy Information Administration's survey of crude-oil inventories for the week ended Oct. 11, and the Fed's so-called beige book of anecdotal economic data.
In commodities, crude oil was losing $3.08 to $75.55 a barrel, as OPEC cut its demand forecast for global oil demand for 2008 and 2009. Gold was falling $2.10 to $837.40 an ounce.
Longer-dated U.S. Treasury securities were rising in price. The 10-year note was up 10/32 to yield 4.04%, and the 30-year was gaining 12/32, yielding 4.25%. The dollar was rising vs. the euro but weakening against the yen and pound.
Overseas, European markets such as the FTSE in London and the DAX in Frankfurt were losing ground. In
, Japan's Nikkei closed slightly higher, while Hong Kong's Hang Seng finished with losses.
