Stocks retreated after a fleeting uptick as a slew of dismal outlooks overshadowed signs of a thawing in the 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 earningsbut missed on revenue. The company also sounded a note of optimism about its drug pipeline.
Caterpillarsaid its quarterly earnings fellas 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.
American Express reported a decline in profit as it set aside more money to cover credit losses but the credit-card provider beat expectations.
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 Thirdbadly 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 targetand the company said its performance may be further affected by market turbulence.
National City , a midwest regional bank hit hard by the credit crisis, announced plans to cut 4,000 jobs after posting its fifth straight quarterly loss.
Schering-Plough shares rose after the drug maker beat expectations, helped by a series of restructuring and expansion moves.
Invetors hammered tech stocks harder than the broader market today after Texas Instruments became the latest tech company to deliver a weak outlook.
TI missed its earnings target and delivered a weaker-than-expected forecast for the fourth quarter. The chip maker said it expects sales to decline "substantially" in the current quarter.
Last week, chip leader Intel also sounded a cautious note about the current quarter.
"We have a high degree of uncertainty around demand in the fourth quarter," Intel finance chief Stacy Smith said.
Even Internet behemoth Google said it may not be immune to the global slump.
"It is pretty clear the economic situation today globally is worse than people were predicting a month ago," Google CEO Eric Schmidt said.
It doesn't help that many underlying factors that helped corporations during the third quarter have disappeared since the economy went into a tailspin in mid-September, Mike Helmar, an economist with Moody's Economy.com told Reuters.
Apple and Yahoo were among the biggest drags on the Dow ahead of their earnings, due out after the closing bell. Analysts expect a profit of $1.11 a share from Apple and nine cents a share from Yahoo.
Dow component 3M beat analyst estimates but the company, which makes everthing from post-it notes to Scotch tape, said it plans to manage business "prudently" for the remainder of the year as economic conditions are expected to remain "volatile."
Shares of UAL, parent of United Airlines, rose after the company posted a net loss but beat expectations. Airlines have also been benefitting from decline oil prices.
Crude oil dropped nearly $4 , trading around $70 a barrel.
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.
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