Updated from 10:17 a.m. EDTU.S. stocks were trading with losses Thursday, as traders took in a flood of corporate earnings statements, saw evidence of additional turmoil in the financial sector and stomached a fresh serving of economic data. The Dow Jones Industrial Average was down 235 points to 8342, and the S&P 500 lost 25 points to 882. The Nasdaq was slipping 33 points to 1594. On Wednesday, stocks suffered heavy losses as traders turned their attention away from an internationally coordinated solution to the credit crisis to focus on an increasingly weak domestic economy. Ahead of the new trading day, Swiss bank UBS ( UBS) received a $5.3 billion cash injection from the Swiss government in exchange for a 9% equity position in the company. UBS and the Swiss National Bank also reached an agreement for UBS to transfer up to $60 billion of currently illiquid securities and other assets from its balance sheet to a separate fund. There was trouble back in the U.S. as well. Bloomberg reported that Citadel Investment Group's largest hedge fund lost as much as 30% this year on bad bets in convertible bonds, stocks and corporate debt. Corporate earnings will once again be in focus. Following the close Wednesday, online auctioneer eBay ( EBAY) swung to a third-quarter profit but said its core business may face difficulties ahead. Quarterly results from financial firms continued to reflect the impact of the credit crunch. Citigroup ( C) reported a third-quarter loss that was narrower than the Street had forecast.
Merrill Lynch ( MER), meanwhile, posted a widened loss that included a $2.5 billion payment related to a stock offering and a $425 million expense tied to settlement of a government approval of its dealings in auction-rate securities. Bank of New York Mellon ( BK) and BB&T ( BBT) announced declines in profit of 53% and 19%, respectively. Beyond the financials, Nokia ( NOK) reported declining profit. Continental Airlines ( CAL) said it lost money for the quarter, in part because of high fuel costs. Southwest ( LUV) registered its first quarterly loss in 17 years as it wrote down its fuel cost-hedging portfolio. On a positive note, coal company Peabody Energy ( BTU) reported a 59% increase in third-quarter earnings on rising revenue. Shifting to economic data, the Department of Labor's September consumer price index showed that prices were unchanged for the month, better than the 0.1% increase expected by economists. The core rate of price increases came in at 0.1%, below a 0.2% increase in August. The Department of Labor also reported that, for the week ended October 11, jobless claims declined by 16,000 to 461,000, below a consensus estimate of 470,000 and down from 477,000 the previous week. Industrial production numbers from the Federal Reserve showed a 2.8% decline in production, the largest decline since December 1974. The Fed estimated that hurricanes accounted for 2.25% of the decline. The Philadelphia Fed's October manufacturing index registered at -37.5, down from 3.8 in September and worse than the -5 forecast by economists. Looking at commodities, crude oil was declining $1.38 to $73.16 a barrel. Gold was slipping $33.70 to $805.30 an ounce.
Longer-dated U.S. Treasury securities were falling in price. The 10-year note was losing 2/32 to yield 3.95%, and the 30-year was down 10/32, yielding 4.21%. The dollar was gaining on the euro and pound but lagging the yen. Overseas, European markets such as the FTSE in London and the DAX in Frankfurt were trading lower. In Asia, the Nikkei in Japan and the Hang Seng in Hong Kong closed with losses.