Stocks retreat after rally

Wall Street backs off after the previous session's rally after a pair of weak economic reports.

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

Can the Big Three make vehicles that Americans want to buy?
  • Yes, if they get a bailout
  • Yes, if they file for bankruptcy
  • No

NEW YORK( -- Stocks slumped Wednesday morning as weak readings on the economy gave investors a reason to retreat after the previous session's run up.

The Dow Jones industrial average (INDU), the Standard & Poor's 500 (SPX) index and the Nasdaq composite (COMP) all declined in early trading.

"For the moment, it looks like were headed for a give-back of yesterday's gains," said Peter Cardillo, analyst for Avalon Partners.

Wall Street rallied Tuesday as investors cheered signs that automakers may get a bailout. The Dow soared 3.3%, the S&P 500 added 4% and the Nasdaq composite climbed 3.7%.

Global stock indexes were mixed. In Asia, major markets finished in positive territory, with the Hang Seng and the Nikkei both rising more than 1%. But European markets were lower in morning trading, with the FTSE in London down 3%, the DAX in Frankfurt down 2.6% and the CAC in Paris off 2.2%.

Economy: Before the market open, two separate reports showed heavy job losses in November.

Non-farm private employment fell by 250,000 jobs in November from the previous month on a seasonally adjusted basis, according to payroll-processor ADP's National Employment Report. The report was expected to show a decline of 200,000 jobs in November, according to a consensus of economist projections compiled by

The outplacement firm Challenger, Gray & Christmas announced that job cuts by U.S. employers soared to 181,671 in November. This is up 61% compared to October's 112,884 cuts, and it is the highest level since 2002.

Also, the Labor Department reported productivity increased by a revised 1.3% in the third quarter, up from the initial reading of 1.1%. This trumped the revised 0.9% increase that was projected economists polled by In the second quarter, productivity rose by 3.6%.

After the market opens, reports from the Institute of Supply Management, a national survey of purchasing managers, and the Fed's Beige Book are due.

At 10 a.m. ET, the ISM services index is expected to show an index of 42 for November, according to the consensus. This would be down from 44 in the prior month, showing further contraction in the sector.

Companies: BlackBerry maker Research in Motion (RIMM) late Tuesday lowered its third-quarter sales and earnings outlook. The Canadian company said it was cutting its view because of the weak U.S. economy and strengthening dollar.

French energy giant EDF made a $4.5 billion offer for assets of wholesale power generator Constellation Energy (CEG, Fortune 500). EDF's bid comes after Constellation already agreed to be taken over by MidAmerican, a unit of Warren Buffett's Berkshire Hathaway (BRK.A).

Big Three: General Motors (GM, Fortune 500), Ford (F, Fortune 500) and Chrysler submitted their turnaround plans to Congress Tuesday and requested more bailout money.

Detroit's Big Three automakers are now asking the government for as much as $34 billion instead of the $25 billion they originally wanted.

Oil and money: Crude prices were flat after recently sinking to a three-year low. U.S. crude for January delivery rose 30 cents to $47.26 a barrel on Wednesday.

In currency trading, the dollar crept higher against the euro and the British pound, but fell versus the yen. To top of page

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
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.