Dow Sheds 1% Amid Recovery Worries

Stocks skidded Tuesday as disappointing reports from McDonald's, 3M and Kroger offset an earnings beat from FedEx.

That exacerbated worries about the recovery and sent investors fleeing to safety, which sent the dollar higher.

The Dow Jones Industrial Average lost more than 100 points, or 1 percent, led by Bank of America. Twenty-nine of 30 components declined — Verizon was the only gainer.

President Obama unveiled his latest plans to stimulate the economyand create jobs, including new tax cuts for small businesses and measures to support renewable-energy manufacturing.

This came after banking analyst Meredith Whitney, who said on CNBC that the government is running out of ways to help the economy.

"I think they're out of bullets,"Whitney said.

One of her biggest concerns is a lack of credit access for consumers, who are "getting kicked out of the financial system."

There were also causes for concern from overseas: European investors worried about banks' exposure to Dubai's debt, a drop in Germany's industrial output and a credit downgrade on Greece.

The dollar edged higher against major currencies — even after Federal Reserve Chairman Ben Bernanke on Monday gave strong indications that the central bank would not be raising rates and defending the US currency anytime soon.

Energy was the worst-performing sector as oil fell, settling at $72.62 a barrel.

Gold dropped to $1,142.80 an ounce.

McDonald'sdragged on the Dow after the fast-food giantsaid same-store sales fell 0.6 percentin November, the second straight monthly decline.

And 3M, which makes everything from Post-It notes to Scotch tape, issued a forecast that missed expectations.

Plus, grocery chain Kroger missed the mark with its earnings and slashed its full-year forecast.

JPMorgan Chase added fuel to the fire, saying it sees additional losses on credit cards and home loansnext year.

That trio of bad news offset an encouraging report after the bell Monday: FedEx delivered earnings that handily beat its previous forecast.

Texas Instruments will release its mid-quarter update at about 5 pm.

Winterizing Your Portfolio - A CNBC Special Report
Winterizing Your Portfolio - A CNBC Special Report

The Wall Street Journal reported that United Airlines is splitting a new order of 50 widebody jets between Boeing and Airbus.

The Journal also reported that Seagate Technology, the biggest maker of computer disk drives, is planning to expand into the market for solid-state drives, devices that store data on memory chips.

In addition, the Journal reported that P&G Chairman A.G. Lafley will be stepping down from his post on Jan. 1, 2010.

And the Treasury kicked off three days of auctions today, selling $40 billion of 3-year notes at a high yield of 1.223 percent and a bid-to-cover ratio of 2.98.

The Treasury will auction $21 billion in 10-year notes tomorrow, followed by $13 billion in 30-year bonds on Thursday.

Volume was light, with 1.18 billion shares changing hands on the New York Stock Exchange. Decliners outpaced advancers, roughly 20 to 9.

This Week:

ALL WEEK: Copenhagen climate summit
TUESDAY: CIT bankruptcy hearing; GE capital investor meeting; 3-year auction
WEDNESDAY: BoE meeting; AOL spinoff; weekly mortgage applications; Madoff hearing; weekly crude inventories; 10-year auction
THURSDAY: BoE rate decision; AOL shares begin trading; international trade; weekly jobless claims; 30-year auction; Earnings from Costco
FRIDAY: Government report on retail sales; import/export prices; business inventories; Art Nadel hearing

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