Wednesday, April 22, 2009

Stocks weaken at the start

Stocks inched lower Wednesday morning after Morgan Stanley's weaker-than-expected quarterly results revived concerns about banking sector profits.

The results overshadowed better-than-expected results from Dow components AT&T, McDonald's and others.

The Dow Jones industrial average (INDU) lost 45 points, or 0.6% in the early going. The S&P 500 (SPX) index gained 6 points, or 0.7%. The Nasdaq composite (COMP) gained 4 points, or 0.3%.

U.S. stock markets advanced Tuesday, staging a late-session rally. The major gauges all gained about 2%.

Despite Tuesday's gains, investors are still wary about the financial sector's results, according to Richard Yamarone, director of economic research at Argus Research.

"The markets are taking their cue from how well the banking situation plays out," he said.
0:00 /2:58Morgan Stanley's bank hunt

Quarterly results: As concerns about the banking sector persist, Morgan Stanley (MS, Fortune 500) reported a bigger-than-expected quarterly loss of $177 million, or 57 cents a share, and cut its dividend. Wells Fargo (WFC, Fortune 500) posted better-than-expected results.

Dow components AT&T (T, Fortune 500), McDonald's (MCD, Fortune 500) and Boeing (BA, Fortune 500) all posted lower first-quarter earnings before the bell. AT&T and McDonald's beat estimates, while Boeing missed by 5 cents a share.

Continental Airlines (CAL, Fortune 500) announced a loss for the first quarter, but results were better than expected. Health insurer WellPoint (WLP, Fortune 500) posted disappointing results.

Other stocks to watch include Yahoo (YHOO, Fortune 500), which announced late Tuesday that it was cutting 5% of its workforce. The company also reported a sharp fall in profit for its latest quarter.

Economy: Treasury Secretary Tim Geithner, speaking Wednesday morning, talked about the need for global cooperation in the face of the unprecedented economic crisis. Geithner spoke at the Economic Club of Washington D.C.

Autos: The White House has spurned a plan put forth by Chrysler's lenders as the deadline for the automaker's restructuring approaches.

Lenders have agreed to write off 35% of the $7 billion they are owed. But in exchange, they reportedly want a stake in the restructured automaker

World markets: Stocks in Asia mostly fell, although Japan's Nikkei ended the session a shade higher. In afternoon trading, European markets tumbled.

Oil and money: Oil prices edged down 25 cents a barrel to $48.30 ahead of the Energy Information Agency's weekly inventory report. The dollar was lower versus the euro and the yen.

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