Midday Market Update: Stocks Lower on Weak Outlook For Earnings, Economy

By , Money Morning •

By Jennifer Yousfi
Managing Editor

U.S. markets headed lower today (Wednesday) on profit and recessionary worries.

At midday in New York, the blue-chip Dow Jones Industrial Average Index was down 48.44 points (-0.39%), to trade at 12,528.00. The tech-laden Nasdaq Composite Index declined 18.17 points (-0.77%), to reach 2,330.59. And the broader Standard & Poor's 500 Index shed 7.56 points (-0.55%), to hit 1,357.98.

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The basic materials sector (up 0.56%) and the energy sector (up 0.85%) posted the biggest gains, while the consumer cyclical sector (down 0.83%) and the transportation sector (down 1.94%) posted the largest declines.

Citigroup Inc. (C) shares gained on a report in The Wall Street Journal that the bank planned to sell $12 billion in debt for 90 cents on the dollar. Fellow financial firms Goldman Sachs Group Inc. (GS), Lehman Brothers Holdings Inc. (LEH) and Morgan Stanley (MS) saw share-price declines after announcing higher levels of "harder-to-value" assets - the so-called "Level 3" assets that have been at the center of many major subprime-related losses in the U.S. finance sector.

Shares of shipping giant United Parcel Service Inc. (UPS) dropped 3% after the firm lowered its outlook for the coming year.

UPS is a "pretty good thermometer of the temperature of the economy,'' Gavin Graham, chief investment officer at Guardian Group of Funds Ltd. in Toronto, which manages about $5.4 billion, said in an interview with Bloomberg Radio. "Unfortunately the temperature is dropping."

In overseas markets early today, Japan's Nikkei Index lost 138.54 points to close at 13,111.89. Hong Kong's blue-chip Hang Seng Index had a 327.12-point loss, to close at 23,984.57.

European bourses were down, with the Paris-based CAC40, London's FTSE 100, Madrid's IBEX 35 and the Frankfurt-based DAX all posting losses.

At midday, the dollar had lost ground against the euro (down 0.425%), the yen (down 0.059%) and the pound sterling (down 0.319%).

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