Stocks slip ahead of earnings reports
NEW YORK -- Wall Street stepped back today ahead of a slew of quarterly earnings reports expected this week and as another drop in oil prices weighed on energy stocks.
Wall Street is expecting fourth-quarter and full-year numbers to be particularly bleak, especially after several companies warned last week that they are being hit hard by the recession.
Oil fell below $40 a barrel as investors worried that a weak economy will hurt demand. That weighed on energy stocks. Financial stocks also declined as investors looked to Citigroup and Morgan Stanley, which could announce as early as Monday a deal to combine their brokerages. The potential deal underscores the troubles with tattered balance sheets still facing many banks.
Wall Street is coming off of its worst week since November. The Dow Jones industrial average fell 4.8 percent for the week, the Standard & Poor's 500 index slid 4.5 percent and the Nasdaq composite index lost 3.7 percent.
On Friday, stocks faltered as the Labor Department's employment report showed the unemployment rate jumped to 7.2 percent from 6.8 percent in November, more than the 7 percent economists predicted.
There are no economic reports scheduled Monday, but investors will likely be anxious ahead of the Federal Reserve's beige book, its assessment of the economy by region. The report, which will be released Wednesday, provides details about the strengths and weaknesses in each part of the country.
Investors are also digesting comments from General Motors that the company has presented a worst-case scenario to Congress in which it would need more money than the $13.4 billion allocated by the Treasury Department.
In the first half-hour of trading, the Dow Jones industrial average fell 45.80, or 0.53 percent, to 8,553.38.
Broader stock indicators also declined. The Standard & Poor's 500 index fell 8.02, or 0.90 percent, to 882.33, and the Nasdaq composite index fell 12.75, or 0.81 percent, to 1,558.84.
