Stocks Turn Lower Again After Paring Losses

Stocks turned lower again after paring most of their losses amid more signs of thawing in the seized up credit markets.

“I think the stock market is in a very critical week,” Art Cashin, director of floor operations at UBS, told CNBC. “I think we may be approaching some kind of resolution by the end of this week or … the middle of next week.”

“The real question is, is that it? Is the bottom in?” Cashin said.

“If we take out the [recent] highs ... then you’d have a strong belief around here that the bottom is in,” he said.

Lending rates fell again, with the overnight London Interbank Offer Rate, or Libor, dropping to 1.28 percent and the three-month Libor down to 3.83 percent. But there was concern among analysts about whether the lower rates would encourage banks to lend amid continued worries about counterparty risk.

"It's a borrowing, it's not a security," Kevin Ferry, of Cronus Futures Management, said on CNBC of the drop in Libor. "So even though the price were to come down it doesn't necessarily start to transact, and that's the key."

Citigroup shares skidded after Goldman Sachs slapped the stock with a "sell" rating, recommending a paired trade: That investors sell Citigroup short and buy Morgan Stanley shares.

Morgan Stanley shares advanced .

Shares of DuPont declined after the chemical maker beat expectations but slashed its outlook amid weaker demand expected both in the US and globally.

Shares of Pfizer rose after the drug maker topped forecasts for earnings but missed on revenue. The company also sounded a note of optimism about its drug pipeline.

>>See a roundup of all of today's earnings.

Caterpillar said its quarterly earnings fell as demand in emerging markets for the construction and mining equipment manufacturer partly offset weakness in the U.S., Europe and Asia. But the company offered a somewhat buoyant outlook on the world economy.

BlackRock's shares declined after the company, the largest publicly traded U.S. asset manager, reported earnings that missed Wall Street's mark.

The news wasn't much better for regional banks: Fifth Third badly missed market forecasts, delivering a loss of 14 cents a share compared with expectations for a profit of 18 cents a share. US Bancorp also missed its target and the company said its performance may be further affected by market turbulence.

Schering-Plough shares rose after the drug maker beat expectations, helped by a series of restructuring and expansion moves.

Texas Instruments reported a drop in quarterly profit, missing forecasts by a penny a share after the bell Monday. The semiconductor maker also issued a forecast for the fourth quarter that was lower than analysts' projections.

The company reported a profit of 43 cents a share in the third quarter on sales of $3.39 billion, against earnings of 52 cents a share on sales of $3.663 billion last year.

Looking ahead, Texas Instruments says it expects sales to decline "substantially" in the current quarter. Shares fell 7 percent premarket..

American Express reported a profit that fell from last year as it set aside more money to cover credit losses, but the shares rose in late trading as earnings exceeded analysts' estimates. Shares gained 4.5 percent in premarket trading Tuesday.

A string of companies will report earnings before the bell. Dow component 3M is expected to post quarterly earnings of $1.38 a share from $1.29 a year ago, according to ThomsonReuters estimates.

Other companies reporting earnings include and  UAL .

Asian stocks ended mixed, while European shares were in the green but off the session's highs.

Ford declined after Kerk Kerkorian, the largest shareholder outside of the Ford family, announced that he is paring down his stake in the auto maker — and may liquidate his entire stake — seeing better value in other industries such as gambling, hotels and oil and gas.

This Week:

TUESDAY: Fed's Stern speaks; Earnings from Apple and Yahoo after the bell
WEDNESDAY: Weekly mortgage applications; weekly oil inventories; Earnings from AT&T, Boeing, Boston Scientific, ConocoPhillips, GlaxoSmithKline, McDonald's, Merck, Northrop Grumman, Philip Morris, Wachovia, WellPoint, Wyeth, Amazon, Amgen, Pulte Homes, Sallie Mae
THURSDAY: Weekly jobless claims; weekly natural-gas inventories; Earnings from Altria, Bristol-Myers Squibb, DaimlerChrysler, Eli Lilly, Raytheon, SunTrust, Union Pacific, UPS, Xerox and Microsoft
FRIDAY: Existing-home sales; Earnings from LM Ericsson

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