Updated from 7:04 a.m. EDTStocks on Wall Street opened lower Tuesday, as traders prepared to pick through a large, lackluster pile of corporate earnings statements. The Dow Jones Industrial Average shed 138 points to 9127, and the S&P 500 gave back 14 points to 971. The Nasdaq was down 29 points at 1741. On Monday, the major indices rallied sharply as credit markets opened up somewhat and Federal Reserve Chairman Ben Bernanke said an economic stimulus package may be a good idea. After the close of that session, credit card firm American Express ( AXP) reported earnings that fell year over year but still beat analysts' expectations. Elsewhere in the financials, business wasn't looking as good. Regional banks Fifth Third ( FITB), National City ( NCC) and KeyCorp ( KEY) all announced losses stemming from bad loans. National City said it plans to cut 4,000 jobs. US Bancorp ( USB) said its income fell from a year ago. Large bank Citigroup ( C) was also in for a hard time following a Goldman Sachs analyst statement that said the firm may not report a profit for the next 12 months and reiterated a sell rating on the stock. Tuesday also marked the deadline for settlement of $400 billion worth of credit default swaps on bankrupt brokerage Lehman Brothers' debt. The Federal Reserve announced that it would buy commercial paper from money-market mutual funds in another effort to massage cramped credit markets. Abroad, Canada's central bank lowered its target interest rate 25 basis points to 2.25%, and France announced plans for a $14 billion capital injection into its largest banks.
The cost of borrowing among big banks was once again declining, as three-month dollar Libor declined to 3.83% from 4.06%. The overnight rate slipped to 1.28% from 1.51%. Many other companies' quarterly results were discouraging. Texas Instruments ( TXN) said it foresaw weak sales in the next six months and said it plans to sell its cell-phone chip business. Equipment manufacturer Caterpillar ( CAT) reported a decline in profit as the cost of raw materials rose. Chemical firm DuPont ( DD) reported third-quarter earnings that fell from a year earlier because of hurricane-related charges. Not all was dismal among industrial firms, however. Conglomerate 3M ( MMM) announced improved earnings thanks to strong international sales. Defense company Lockheed Martin ( LMT) also saw earnings improvement and raised its full-year expectations. Drugmakers Pfizer ( PFE) and Biogen Idec ( BIIB) also reported. Biogen beat estimates, and Pfizer posted substantial earnings gains. Schering-Plough ( SGP) said its profit declined but revenue increased 63%. As for the automakers, The Wall Street Journal reported that Chrysler might partner with Nissan ( NSANY) and Renault for purposes of manufacturing and development. The Journal said that Chrysler would still prefer to merge with General Motors ( GM). Ford ( F) was also looking troubled after billionaire investor Kirk Kerkorian, whose Tracinda Corp. is the largest Ford shareholder barring Ford family members, sold about $17.7 million of its stake in the company to focus on opportunities in gaming, hospitality and oil and gas. Looking at commodities, crude oil was declining $2.18 to $72.07 a barrel, and gold was down $21.50 to $768.50 an ounce. Longer-dated U.S. Treasury securities were rising in price. The 10-year was down 12/32 to yield 3.79%, and the 30-year was losing 15/32, yielding 4.23%. The dollar was gaining on the euro and pound but shrinking vs. the yen.
Overseas, European exchanges such as the FTSE in London and the DAX in Frankfurt were trading lower. As for Asian markets, Japan's Nikkei closed on the upside, while Hong Kong's Hang Seng finished with losses.