Midday Market Update: Stocks Stumble on Weaker Financial Outlook

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By Jennifer Yousfi
Managing Editor

Stocks dropped lower today (Wednesday) on weak durable goods numbers and Oppenheimer & Co.'s (OPY) revised forecast that first quarter banking losses will be larger than previously expected.

At noon ET, the blue-chip Dow Jones Industrial Average Index had posted a decline of 111.45 points (-0.89%), to trade at 12,421.15. The tech-laden Nasdaq Composite Index dropped 25.12 points (-1.07%), to reach 2,315.93. And the broader Standard & Poor's 500 Index slumped 10.32 points (-0.76%), to hit 1,342.67.

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Sectors were mixed with the basic materials sector (0.96%), and the energy sector (1.70%), posting the largest gains. The financial sector (-1.96%) and the transportation sector (-1.90%) had the biggest declines.

"By signaling a decline in business spending, which has declined in each of the past eight recessions, today's report is consistent with economic recession," Tony Crescenzi, chief bond market strategist at Miller Tabak & Co., told MarketWatch, speaking of the durable-goods data.

The Commerce Department announced that durable goods orders, which include machinery and other capital goods, declined 1.7% in February from a revised 4.7% decline in January. Economists had generally expected a slight increase of 0.5%.

Oppenheimer's Meredith Whitney estimated losses for the four largest banks would be four times larger than previously expected, sending Citigroup Inc. (C) and Bank of America Corp. (BAC) shares lower.

In overseas markets, Japan's Nikkei Index slumped 38.59 points to close at 12,706.63. Hong Kong's blue-chip Hang Seng Index increased 152.49 points to close at 22,617.01.

In Europe, the Paris-based CAC40, London's FTSE 100, Madrid's IBEX 35 and the Frankfurt-based DAX all posted losses after dropping in late afternoon trading.

At midday, the dollar had lost ground against the euro (down 0.687%) and the yen (down 0.731%), but gained ground against the pound sterling (up 0.235%).

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