Stocks tumble out of the gate

Investors still trying to shake worries about the economy and financial sector; Paulson to provide update on bailout.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By CNNMoney.com staff

What is the housing situation in your area?
  • Lots of foreclosures
  • Fairly stable
  • It's booming

NEW YORK(CNNMoney.com) -- U.S. stocks opened lower Wednesday, after electronics retailer Best Buy lowered its profit forecast and the Macy's department store chain reported a quarterly loss.

The Dow Jones industrial average (INDU) was down 2% shortly after the opening bell. The Standard & Poor's 500 (SPX) index fell 1.9% and the Nasdaq composite (COMP) slid 1.6%.

Wall Street turned in another weak performance Tuesday, with the major gauges all losing about 2%.

Overseas markets tracked those losses Wednesday. The Nikkei in Japan fell 1.3%. European markets were also lower. .

Treasury Secretary Henry Paulson is expected to provide an update on the $700 billion bailout for finance companies at a press conference scheduled for 10:30 a.m. ET.

A big week for retail: Best Buy, the nation's largest electronics retailer, cut its full-year profit forecast, citing continued weakness in consumer spending ahead of the all-important holiday shopping period.

The company now expects earnings for the year to be between $2.30 and $2.90 a share on sales of between $43.7 billion and $45.5 billion. The company previously had forecast full-year earnings of between $3.25 and $3.40 a share.

Best Buy (BBY, Fortune 500) said same-store sales for the year could decline between 1% to 8% compared to its previous estimate for an increase of 2% to 3%.

Department store operator Macy's said it swung to a loss in the fiscal third quarter as sales dropped on declining consumer spending and the weak economy.

The Cincinnati-based chain said it lost $44 million, or 10 cents per share, in the quarter, after a profit of $33 million, or 8 cents per share, a year earlier. Excluding certain charges, the loss was 8 cents per share.

Analysts had expected a loss of 19 cents per share, according to a consensus of analyst projections from Thomson Reuters.

Sales declined 7% in the quarter.

Macy's (M, Fortune 500) stood by its earnings outlook, saying the company's profit would be near the lower end of the range if sales remain weak. Macy's expects earnings in the range of $1.30 to $1.50 per share this year.

Other retailers reporting results this week: Wal-Mart (WMT, Fortune 500), the world's largest retailer, is slated to report its results Thursday, while J.C. Penney (JCP, Fortune 500) is on tap for Friday.

Also on Friday, the Commerce Department will release its retail sales figures for October. Economists are expecting a decline of 2.1% from the prior month, according to a consensus of projections by Briefing.com.

American Express: The credit card issuer is seeking an estimated $3.5 billion in aid from the federal government, according to The Wall Street Journal.

The Federal Reserve, using emergency power, granted approval for American Express (AXP, Fortune 500) to become a bank holding company Monday.

Oil and currencies: Oil prices fell below $59 a barrel. U.S. light crude for December delivery droped $2.25 to $57.06 a barrel.

The dollar slipped against the euro and the yen, but edged up versus the British pound. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
50 years of the Ford Mustang Take a drive down memory lane with our favorite photos of the car through the years. More
Cool cars from the New York Auto Show These are some of the most interesting new models and concept vehicles from the Big Apple's car show. More
8 CEOs who took a pay cut in 2013 Median CEO pay inched up 9% in 2013 to $13.9 million. But not everyone got a bump last year. Here are eight CEOs who missed out. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.