In the final full trading day before Christmas, the Dow ended in negative territory on Tuesday, extending its losing streak to five amid the latest bearish economic and corporate news.
Today's Markets
The Dow Jones Industrial Average lost 100.28 points, or 1.18%, to 8419.49, the S&P 500 fell 8.48 points, or 0.97%, to 863.15 and the Nasdaq Composite slid 10.81 points, or 0.71%, to 1521.54. The consumer-friendly FOX 50 ended down 4.55 points, or 0.68%, to 666.15.
The markets were unable on Tuesday to shrug off the latest disappointing headlines as casino operator Las Vegas Sands (LVS) and corporate jet manufacturer Textron (TXT) released new job cuts and the government said new home sales slumped to 1991 levels in November and the economy shrank by 0.5% in the third quarter.
“We need something fundamentally to change in the economy to change the [market's selling] dynamic," NYSE trader Ted Weisberg told FOXBusiness.
While the markets have suffered another string of losses, they have come on relatively low volume ahead of the holidays, indicating a lack of conviction. The recent losses have also come without the panic-selling that became a staple of recent months as the Dow seemed to routinely lose more than hundreds of points per day. In contrast, the index is off by roughly 500 points over the past week, giving back much of its recent gains.
"It looked like the market was getting some leg up until the last few trading days but we just seem to be sliding backwards now," said Weisberg. “There’s always hope, but the fact is that I think we are going to limp until the end of the year.”
For the second day in a row, General Motors (GM) led the way down on the Dow, sliding further on concerns about the company's equity. Also, Bank of America (BAC) and Citigroup (C) fell sharply. On the upside, aluminum titan Alcoa (AA)and General Electric (GE) ended modestly higher.
The Nasdaq Composite closed with more modest losses. Shares of online auction site eBay (EBAY) and memory card makerSanDisk (SNDK) tumbled, offsetting gains from Google (GOOG) and search company Baidu.com (BIDU).
On the energy front, crude oil futures ended in the red for the eighth consecutive day as demand fears continue to decimate the commodity. The price of a barrel of crude closed down 93 cents, or 2.33%, to $38.98. The commodity has lost more than one-quarter of its value in December and is off by roughly 75% since hitting $145 a barrel in early July.
Gloomy Data Weigh on Markets
While the markets manage to avoid a selloff on the latest bleak economic figures, the new reports underscored the deteriorating economy.
At the forefront, the Commerce Department confirmed the nation's gross domestic product declined by 0.5% in the third quarter, a reading that economists had expected. The final third-quarter GDP reading comes as the U.S. is mired in what is already the longest recession in a quarter century. Still, some economists worry GDP may plunge by as much as 6% in the current quarter as the economy deteriorated further.
On the housing front, the National Association of Realtors said sales of existing home sales declined by a worse-than-expected 8.6% in November to a rate of 4.49 million units. Similarly, the Commerce Department said sales of new homes tumbled by 2.9% last month to a rate of 415,000 units -- the slowest pace in almost 18 years.
Despite all of that negative economic news, the University of Michigan/Reuters consumer sentiment index unexpectedly improved to 60.1 in December, well above the 56.0 reading economists forecasted.
Corporate Movers
Toyota (TM) President Katsuaki Wantanabe is expected to resign next year in a move tied to health problems of the auto maker's chairman, Fujio Cho, The Wall Street Journal reported. Wantanabe's expected resignation isn't related to a need for a change in strategic direction at the struggling auto giant, the newspaper reported.
American Express(AXP) received preliminary approval from the government to get an injection of $3.39 billion. AmEx, which became a bank holding company last month to gain access to the $700 billion rescue funds, will give the government preferred stock and warrants in exchange for the injection.
CIT Group (CIT) received a green light from the Treasury Department for a $2.33 billion investment. The injection comes a day after the Fed allowed the commercial finance company to transform into a bank holding company.
Circuit City (CC), the electronics retailer that filed for Chapter 11 bankruptcy protection last month, reportedly won approval from a bankruptcy court for $1.1 billion in reorganizing financing. According to Reuters, Circuit City said same-store sales at stores not slated to close fell by up to 50% since the filing.
IndyMac Bancorp, the collapsed California lender, may have been allowed to backdate a capital infusion months before it was seized by federal regulators, the Journal reported. The Treasury Department is reportedly investigating the Office of Thrift Supervision over the infusion that allowed the bank to remain classified as “well capitalized.”
Las Vegas Sands (LVS) slashed 500 jobs, including 10 managers, at its Venetian Macau casino project, the Journal reported. The casino operator also said it plans to cut staff working hours as it suspends construction activity, the newspaper reported.
Textron (TXT), the No. 1 global corporate jet manufacturer, slashed its fourth-quarter outlook and announced plans to cut 2,200 jobs due to the recession. The company also said it plans to stop lending to non-customers.
Micron Technology (MU) is expected to report a loss of 43 cents per share after Tuesday's closing bell.
World Markets
European indexes ended narrowly mixed as London's FTSE 100 closed 0.16% higher but France's CAC 40 slumped 0.73%.
In Asia, Japan's Nikkei 225 closed 1.57% higher overnight while Hong Kong's Hang Seng plunged 2.75%.
Fed Hangover: Dow Falls 100
Dollar General sales are up 12.4%
