Gloomy Guidance Smacks Stocks

Updated from 9:39 a.m. EDT

Stocks 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.

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