The markets suffered a late-day selloff on Wednesday as WallStreet gave back some of Fed Day's huge gains despite crude oil futures slumping to fresh 4 1/2-year lows.
Today's Markets
The Dow Jones Industrial Average lost 99.80 points, or 1.12%, to 8824.34, the S&P 500 fell 8.76 points, or 0.96%, to 904.42 and the Nasdaq Composite slid 10.58 points, or 0.67%, to 1579.31. The consumer-friendly FOX 50 dropped 9.98 points, or 1.41%, to 699.10.
The afternoon slide also came as Morgan Stanley (MS) disclosed a $2.2 billion quarterly loss -- news that came just a day after Goldman Sachs (GS) revealed its first losing quarter since going public in 1999.
"The market has basically been ignoring all the bad news out the last two weeks or so. Maybe they will be paying a bit more attention now," NSYEtrader David Henderson of Raven Securities told FOXBusiness.
Since hitting its lowest level in 3 1/2-years on November 20, the Dow has surged roughly 1200 points in the face of some of the gloomiest economic and corporate news seen this year. A day ago the Dow surged 360 points after the Fed slashed interest rates to a range of 0% to 0.25% -- the lowest level on record.
Bank of America(BAC) and Citigroup (C) led the way down on the benchmark index on Wednesday, offsetting solid gains for General Motors(GM)and Caterpillar (CAT).
"I think the market still has a reasonably positive tone to it, certainly in the short term. Perhaps these moments of weakness are not selling opportunities but buying opportunities," NYSE trader Ted Weisberg of Seaport Securities told FOXBusiness.
There weren't any major economic reports released Wednesday so the markets shifted their attention to the volatile price of crude oil, which briefly plunged below $40 a barrel even though OPEC announced its largest production cut in history. After slipping as low as $39.88, the price of a barrel of crude closed down $3.54 to $40.06.
The energy market failed to rally around OPEC's decision to slash output by 4.2 million barrels per day from September's level, a move made to combat the free falling price of crude. Instead, the energy market focused on more demand fears as a new oil inventory report from the government showed crude stockpiles rose by a larger-than-expected 525,000 barrels last week.
Transportation stocks benefited from the lower oil prices as railroaders like Union Pacific (UNP) and airlines such as Continental (CAL) ended sharply higher.
Some of the luster from the Fed move faded after Morgan Stanley (MS) disclosed much worse-than-expected results. Morgan lost $2.2 billion, or $2.24 a share, on revenue of $1.83 billion. Analysts forecasted much stronger results, predicting a loss of just 33 cents per share on $4 billion in revenue.However, shares of Morgan ended sharply higher, erasing earlier losses and giving the rest of the financial sector a boost.
Corporate Movers
Chrysler LLC’s financing arm warned it may need to halt loans used to stock dealership lots due to heavy withdrawals sparked by bankruptcy fears, The Wall Street Journal reported.
GMAC LLC, the financing arm of General Motors (GM), extended its debt exchange deadline for the fourth time. The offer, which has yet to draw the necessary demand, is part of GMAC’s efforts to become a bank-holding company and gain access to Fed rescue funds.
Citigroup (C) is facing increased scrutiny from regulators about the bank’s strategic direction and potential acquisitions, the Journal reported. Given that the U.S. is now Citi’s largest shareholder, the Fed and another banking regulator expect to have veto power over key strategic decisions, the newspaper reported.
General Mills (GIS), the breakfast cereal maker, topped expectations with earnings of $1.36 per share thanks to a 16% jump in baking products sales. The company also raised its 2009 earnings per share forecast.
Apple (AAPL) fell sharply after the tech heavyweight said CEO Steve Jobs won’t attend the upcoming Macworld show, sparking fears about his health. The news also prompted an Oppenheimer analyst to downgrade the stock to “perform.”
Aetna (AET) disclosed plans to slash 1,000 jobs, or 3% of its workforce before the end of 2008 due to the recession.
Macy’s (M) ended sharply higher after amending a credit agreement, a move aimed at “providing substantial liquidity…to weather the economic downturn.”
Constellation Energy (CEG) lost one-fifth of its market value after signing off on a deal to sell almost half of its nuclear power business to Electricite de France and slash its dividend by 60%. The sale scuttles a takeover effort by Warren Buffett’s MidAmerican Energy.
BNP Paribas, France’s largest bank by market cap, saw its shares plunge after disclosing an unexpected loss at its corporate and investment banking division.
ConAgra Foods (CAG) beat the Street with fiscal second-quarter earnings of 43 cents per share and still sees fiscal 2009 earnings exceeding expectations.
Global Markets
European indexes closed narrowly mixed as London's FTSE 100 advanced by 0.35% but Germany's DAXslumped 0.46%.
Asian markets ended in the green overnight, led by a 2.18% jump for Hong Kong's Hang Seng.
Wal-Mart’s profits rise as it draws from rivals
Mixed Verdict to Fed Day
