Stocks slide in early trading
Wall Street retreats as investors gear up for bank bailout news and new warnings from Obama about economy.
NEW YORK (CNNMoney.com) -- Stocks slipped Tuesday morning as investors geared up for the Obama administration's overhaul of the bank rescue plan, due to be announced shortly.
Investors are also gearing up for the Senate vote on its version of the economic stimulus package.
An hour into trading, the Dow Jones industrial average (INDU) lost 110 points, or 1.34%. The Standard & Poor's 500 (SPX) index lost 14 points, or 1.55%. The Nasdaq composite (COMP) lost 13 points, or 0.8%.
Stocks were barely changed Monday, as Congress debated the economic stimulus plan, and the Treasury's banking bailout program was delayed.
Dave Rovelli, managing director for Canaccord Adams, said the markets were unlikely to make any radical moves ahead of Tuesday's Senate vote on President Obama's stimulus package.
Rovelli said traders will probably stay within the range of "a minor rally or a minor selloff."
Asian markets ended mixed Tuesday, with Tokyo's Nikkei index slipping 0.3%. European stocks were lower in afternoon trading.
Oil rose $1.93 to $41.49 a barrel on the New York Mercantile Exchange. The U.S. dollar fell versus the yen but rose against the euro and the British pound.
Obama: Obama campaigned for his economic stimulus package Monday, telling a prime time news conference that the approximately $800 billion in spending is needed to break a "vicious cycle" that has crippled the nation's economy.
"With the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back to life," said Obama.
Stimulus: The Senate's version of the stimulus bill cleared a hurdle late Monday when a vote to end debate was approved 61-36. Three Republican senators voted with the Democratic majority to invoke cloture, setting up a final vote Tuesday on the measure - whose cost was estimated by the Congressional Budget Office at $838 billion.
Once the Senate approves, the measure needs to be reconciled with the House's $820 billion bill passed late last month. Proponents have said that they will try to get the final version of the bill on Obama's desk by Presidents Day, which is next Monday.
Bailout: In a speech and in later congressional testimony, Treasury Secretary Tim Geithner will unveil the administration's plan for the remaining $350 billion of the rescue package for the nation's financial institutions.
Obama wouldn't give details of the proposal at his news conference Monday, but said Geithner would have "very clear and specific plans" for loosening the credit squeeze, with some of the money aimed at easing the wave of foreclosures that helped cripple the economy.
There has been some speculation that Geithner might announce the creation of a so-called "bad bank" that would let the government remove bad assets from bank balance sheets in an effort to get banks to start lending again.
"We'll see if the enthusiasm and the anticipation of these events follows through," said Art Hogan, chief market strategist at Jefferies & Co. "Or will we get that pattern of trading that we've gotten used to so far: buy on the rumor, sell on the news?"
Jobs: General Motors (GM, Fortune 500) said on Tuesday that it was cutting 10,000 salaried positions worldwide, including 3,400 in the U.S. The automaker also said it was slashing pay of its salaried U.S. workers by May 1.
Economy: The government's report on wholesale inventories is also scheduled for release Tuesday. Economists expect to see a decline of 0.7% for the month of December, according to a poll of analysts by Briefing.com. 
