Wall Street opens lower on grim corporate news

NEW YORK - Wall Street gave back some of last week's big gains Monday as euphoria over the government's expected stimulus bill waned amid more grim corporate news. The Senate is expected to pass an $827 billion stimulus bill on Tuesday.

By (AP)

Published: Mon 9 Feb 2009, 9:11 PM

Last updated: Thu 2 Apr 2015, 3:54 AM

The government, however, still faces the challenge of reconciling the Senate bill with the House's $819 billion version that passed earlier. Republicans and Democrats have been at odds over the plan, which is designed to help pull the economy out of the worst recession in decades. President Barack Obama is still pressing to have the stimulus measure on his desk for signing by the middle of this month.

Investors are also awaiting a Tuesday speech by Treasury Secretary Timothy Geithner outlining the Obama administration's plan to overhaul the government's $700 billion financial bailout package passed by Congress last fall. Geithner had been scheduled to announce the plan Monday, but the White House pushed back the speech to focus on the stimulus bill.

"The delay in the Geithner announcement means the markets are going to have to wait another 24 hours, and markets don't wait very well," said Alan Gayle, senior investment strategist at RidgeWorth Investments. "The delay only raises anxiety."

Amid the anticipation over the government's plans there were stark reminders that an economic recovery is still far off.

Nissan Motor Co. said it will slash 20,000 jobs, or 8.5 percent of its global work force, over the next year to cope with what the Japanese automaker expects will be its first annual loss in nine years.

Home appliance maker Whirlpool Corp. said fourth-quarter profit dropped 77 percent, hurt by a restructuring charge, a recall expense and the stronger dollar.

Meanwhile, Barclays PLC warned that further asset write-downs — on top of the massive $11.9 billion booked for 2008 — were likely and said executive directors would not be getting any bonuses. However, Britain's third-largest bank by assets said its 2008 net profit fell only 1 percent, boosted by last September's acquisition of part of failed investment bank Lehman Brothers Holdings Inc.

In the first hour of trading, the Dow Jones industrial average fell 26.53, or 0.32 percent, to 8,254.06.

Broader stock indicators also fell. The Standard & Poor's 500 index fell 1.10, or 0.13 percent, to 867.60, and the Nasdaq composite index fell 5.58, or 0.35 percent, to 1,586.13.

On Friday, the market largely overlooked a horrible jobs report and rallied in anticipation of the stimulus bill. The Labor Department said U.S. employers slashed 598,000 jobs in January, sending the unemployment rate to 7.6 percent, the highest since late 1992. The day's gains helped push Wall Street up sharply higher for the week.

The Dow Jones industrials ended the week up 3.5 percent, the Standard & Poor's 500 rose 5.2 percent and the Nasdaq composite index posted a huge 7.8 percent gain.

"Given that we had a good two-day rally and a strong performance last week, it's not surprising that we would see some softness," Gayle said. "There is a tug of war between the problems that we know are in front of us and the promise that is expected between the bank rescue package and the stimulus plan."

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