Updated from 9:39 a.m. EDTStocks in New York were losing ground Wednesday morning, as corporate earnings again took center stage and concerns of a global slowdown increased. The Dow Jones Industrial Average lost 363 points to 8671, and the S&P 500 was down 36 points to 919. The Nasdaq dropped 37 points to 1660. Investors are having difficulty finding sectors that will lead a new rally, wrote Robert Pavlik, chief investment officer at Oaktree Asset Management. He wrote that as traders remain on the sidelines trying to find winners, volume has fallen substantially, causing an increase in volatility. "Because of this uncertainty, it brings into question whether or not we go back and retest the lows of October 10," he wrote. Peter Cardillo, chief market economist at Avalon Partners, said earnings have been mixed, but forward guidance is weighing on investor sentiment, "I think it's just one more excuse in a bear market," he said. Cardillo said that stocks need a new catalyst to turn sentiment. Investors may take heart if the settlement of credit-default swaps tied to bankrupt brokerage Lehman Brothers are settled without major defaults. "Obviously this market is way oversold. All we're seeing here is a market that continues to feel the weight of uncertainty." Following Tuesday's close, traders heard from some big technology names. Apple ( AAPL) reported a 26% increase in third-quarter earnings. Strong iPhone sales contributed to the improvement, but the company worked to temper expectations for the fourth quarter on a slowing economy. Internet portal Yahoo! ( YHOO) also announced third-quarter earnings, saying profit declined 64%. The company also said it would cut at least 1,500 jobs this year.
Ahead of the new day's trading, investors were be shoveling through a fresh pile of earnings statements. Telecommunications service provider AT&T ( T) announced that profit grew 5.5% year over year but fell short of analysts' expectations. On the industrial side, aircraft maker Boeing ( BA) saw income shrink 38% year over year, while rival Northrop Grumman ( NOC) reported increasing net income and raised guidance. In the energy patch, oil-services company Baker Hughes ( BHI)said its profit increased 10% year over year, while integrated oil firm ConocoPhillips ( COP) delivered an earnings beat on increasing revenue. As for financial results, regional bank Wachovia ( WB) swung to a $24 billion loss for the third quarter . Fast-food provider McDonald's ( MCD), meanwhile, reported results that beat the Street's estimates. Cigarette maker Philip Morris International ( PM) reported rising profit on increasing revenue and organic growth. Away from earnings, credit markets showed continuing signs of improvement. Three-month dollar Libor, a measure of the rate banks charge one another for large loans, declined 29 basis points to 3.54%. The overnight rate dropped to 1.12%. "While the recent credit crisis is slowly correcting, investors should stay mindful that we're still in a weakening economic environment," wrote Pavlik of Oaktree. "But even more worrisome is the fact that the recent economic reports do not reflect the changes in consumer and business spending brought on by the recent weakness in the stock market and the freeze in the credit markets." On a day that was rather light on economic data, the Energy Information Administration reported that crude-oil inventories increased by 3.2 million barrels in the week ended Oct. 18.
In commodities, crude oil was losing $4.04 to $68.14 a barrel. Gold was giving back $19.60 to $748.40 an ounce. Longer-dated U.S. Treasury securities were rising in price. The 10-year note was up 24/32, yielding 3.65%. The 30-year was gaining 1-23/32 to yield 4.12%. The dollar was logging massive gains vs. the euro and pound but weaker against the yen. Overseas, European indices, including the FTSE in London and the DAX in Frankfurt, were mainly trading lower. Asian markets also finished lower.