Stocks Wobble After Morning Selloff
Stocks wavered after a morning selloff as investors shrugged of the latest wave of dismal news: Retailers reported profit declines, big banks prepared for job cuts and Japan officially declared itself in a recession.
The weekend meeting of the world's 20 largest economies offered no surprises and had little impact on trading. G20 leaders agreed to tighten lending standards, curb protectionist views and take other measures to help prevent a repeat of the current global financial crisis.
Japan's economy contracted for a second straight quarter, falling 0.1 percent in the third quarter, following a downwardly-revised 0.9-percent drop in the second quarter.
Back in the U.S., the economy is expected to fall 2.6 percentin the fourth quarter and the recession is expected to continue in the first three quarters of next year, according to a survey by the National Association of Business Economists.
The economic data were light this morning: The New York Fed reported its gauge of regional manufacturing activity hit another new low in October, and nationwide, industrial output rose 1.3 percent, more than expected, though that followed the biggest drop in more than 60 years.
Citigroupis cutting 53,000 jobs, or 20 percent of its work force, as the company aims to make "dramatic" moves, according to a source close to the company, to convince investors it's taking action to get the company back on track.
JPMorgan Chase is also poised for job cuts: The bank is expected to expected to cut thousands of jobs from its global operations next year, according to a report in UK newspaper The Sunday Telegraph.
Goldman Sachs was also tightening its belt, announcing that top executives would forgo their bonusesthis year.
Swiss bank UBS followed suit, axing bonuses for its top executives. American depositary shares of UBS rose.
Shares of Genworth Financial jumped more than 10 percent after the life and mortgage insurer announced plans to buy a small Minnesota bank, Interbank. The deal, seen as a necessity for Genworth to get access to TARP funds, followed a similar move by fellow insurer Hartford Financial Services , which announced plans to buy Florida-based Federal Trust. Shares of Hartford fell sharply.
Auto makers were back in the spotlight, with Congress preparing to take up the issue of a bailoutfor the troubled sector.
General Motors was the biggest gainer on the Dow after the company took action to free up some cash, announcing plans to sell its 3 percent stake in Suzuki Motor, worth $232 million, back to the Japanese auto maker.
Lowe's shares slipped after the home-improvement retailer reported its profit declined and cut its full-year outlook, a recurring theme in this quarter's retail earnings reports.
Target reported its profit fell for a fifth straight quarter as penny-pinching shoppers flocked to cheaper rival Wal-Mart . The trendy discount chain also temporarily suspended nearly all of its share buybacks and cut capital spending.
Dell shares skidded after Merrill Lynch downgraded its rating on the computer maker to "hold" from "buy," saying the market for personal computers is deterioriating and it sees no catalysts to boost growth in the next few quarters.