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U.S. Stocks Open on Mild Downtick

A spate of negative headlines in the financial sector, as well as several downgrades, weigh on sentiment.
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Updated from 9:04 a.m. EDT

Stocks on Wall Street opened Tuesday to the downside, as bad news from financial firms weighed on sentiment.


Dow Jones Industrial Average

dropped 74 points to 11,708, and the

S&P 500

lost 6.5 points to 1299. The


slipped 12 points 2428.

On the corporate front, a spate of negative headlines struck at several big financial names. Moody's downgraded

Morgan Stanley's


debt rating after the close Monday, to A1 from Aa3, saying that Morgan did a poor job of managing risk during the credit crisis.

Offering further credit-related headwinds, Standard & Poor's cut its ratings on holdings of mortgage firms

Fannie Mae



Freddie Mac


, a move that could hurt the companies' efforts to raise additional capital.

Elsewhere in the financial space,



said it would cut 600 more jobs and revised its second-quarter loss to $9.11 billion from $8.86 billion. The bank said it was increasing its legal reserves as it discusses a possible settlement with the government over its dealings in auction-rate securities.

Investment bank

JPMorgan Chase


said in a filing with the

Securities and Exchange Commission

that it was writing down $1.5 billion in mortgage-related assets.

Traders will also be focusing on Swiss bank



$331 million second-quarter loss. The company said it would split its investment-banking business from its wealth-management segment to quell customer concerns.

In technology,

Advanced Micro Devices


announced after the market close Monday that it would release a new graphics card, which it said is the world's fastest.

In retail, department-store operator



announced a year-over-year increase in profits and raised its earnings expectations for the full year.

Elsewhere, biotechnology firm

Gilead Sciences


won government approval to market its HIV drug Viread for chronic hepatitis B patients.

Meanwhile, billionaire investor Carl Icahn increased his stake in

Biogen Idec


to 6% from 4.3%. Icahn has been seeking a sale of the biotech company.

As for analyst actions, UBS downgraded fast-food seller and member of the

Dow Jones Industrial Average



to neutral from buy.

Goldman Sachs


, on the other hand, caught a Deutsche Bank downgrade to hold from buy.

The airline sector also caught a series of nods from JP Morgan, which slapped overweight stickers on American Airlines' parent







US Air



Alaska Air








got a JPMorgan bump to neutral from underweight.

Moving over to commodities, crude oil was lately rising $1.41 to $115.86. Oil company



announced it was shutting down two oil and gas pipelines that run through Georgia to forestall potential damage related to Georgia's conflict with Russia. Russia announced today that it was ceasing its operations against Georgia, but did not announce a withdrawal. Gold was gaining $1.80 to $830.10.

U.S. Treasuries were edging upward in price. The 10-year note was adding 16/32, yielding 3.93%, and the 30-year was up 26/32 to yield 4.55%. The dollar was falling against the euro and the yen, but edging up vs. the pound.

In economic data, the June trade deficit was revised down to $56.8 billion from $59.8 billion, a smaller deficit than the consensus estimate of $61.9 billion. A large increase in exports helped to counteract high petroleum imports. A little later, the U.S. Treasury will announce its budget for July.

Abroad, European markets were mixed, while Asian exchanges lost ground. The FTSE in London was working higher, while the DAX in Frankfurt, the Nikkei in Tokyo and the Hang Seng in Hong Kong were logging declines.