Merrill misery sours stocks' mood

NEW YORK (CNNMoney.com) -- Stocks turned lower at the start of Wednesday's session after Merrill Lynch reported a steep quarterly loss and took a bigger-than-expected $7.9 billion writedown due to bad subprime mortgage bets.

The Dow Jones industrial average (Charts) lost 0.2 percent in the opening minutes of trade.

The broader S&P 500 index (Charts) fell about 0.3 percent while the tech-laden Nasdaq index (Charts) declined 0.6 percent.

Merrill (Charts, Fortune 500) recorded a net loss of $2.3 billion for the quarter and said it was taking a larger-than-projected writedown totaling $7.9 billion because of losses from subprime loans and collateralized debt obligations. Shares of the bank fell 1 percent on the news on the New York Stock Exchange.

Dow component Boeing (Charts, Fortune 500) surprised investors by delivering a 61 percent jump in quarterly results that topped forecasts, while the company also raised both its earnings and revenue guidance for 2007.

Online retailer Amazon.com (Charts, Fortune 500) saw its sales and earnings surge in the most recent quarter, the company reported late Tuesday. But the results were not as robust as some investors had hoped, sending its shares 12 percent lower on the Nasdaq.

On the economic front, Wall Street will have the National Association of Realtors' existing home sales reading for September at 10 a.m. ET. Economists surveyed by Briefing.com are forecasting that the pace of sales fell to at least a six-year low in the period, and further declines in prices are likely.

Treasury prices rose, lifting the yield on the benchmark 10-year note to 4.37 percent, down from 4.4 percent late Tuesday.

Oil prices retreated in morning trade as light, sweet crude for December fell 16 cents to $85.11 a barrel on the New York Mercantile Exchange, ahead of the 10:30 a.m. ET weekly report on U.S. fuel inventories.

In global trade, stocks in Asia gave up their gains, while major European exchanges were mixed in midday trading.