Stocks Slide as Oil Tops $121; Fannie Drops
Stocks declined as oil surpassed $121 a barrel and Fannie Mae posted a third straight quarterly loss.
Crude oil jumped over the $121 mark -- and came with a few cents of $122 a barrel before pulling back to the mid-$121 range -- amid concerns about the already-crunched consumer.
"On the floor, there's a feeling that the consumer may have hit a wall about three weeks ago," Art Cashin, director of floor operations at UBS, told CNBC. "How much it costs to fill up the tank ... how they're seeing signs of cutbacks ... that's all anecdotal to what starts to show up in the numbers."
Fannie Mae, the largest provider of US home financing, reported its third straight quarterly loss and lowered its common stock dividend, projecting that credit losses will stretch into 2009.
Swiss bank UBS said it plans to cut 5,500 jobs in one of the biggest purges so far in this financial-market crisis. The company also announced a preliminary deal with U.S. asset manager BlackRock to sell $15 billion in subprime mortgages.
A day earlier, U.S. brokerage firm Morgan Stanley announced its planning another round of layoffs, finalizing a plan to reduce its workforce by another 5 percent. It's part of the next wave of layoffs headed for Wall Street, with cuts in the works at both JPMorgan Chase and Lehman Brothers , CNBC has learned.
In the tech sector Yahoo investors are weighing a move to oust the boardafter Microsoft walked away in frustration form the $33 a share bid.
Microsoft Chairman Bill Gates said Tuesday that the software giant hasn't ruled out partnerships with other companies since the Yahoo deal went bust but nothing is imminent.
On the earnings front, Disney and Cisco Systems are set to report after the closing bell.
There are no major economic data due today, when the markets will also keep an eye on the Indiana and North Carolina primaries.
TUESDAY: Indiana, North Carolina primaries; Earnings from Cisco and Disney after the bell
WEDNESDAY: Mortgage applications; Productivity; Pending home sales; Crude inventories; Consumer credit; Earnings from News Corp., Transocean
THURSDAY: Retail same-store sales; Jobless claims; Wholesale trade; Cablevision earnings
FRIDAY: Trade report
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