U.S. stocks fell for the second day on Wednesday after economic bellwether FedEx Corp. released disappointing results and reinforced concern over bank losses.
Finance companies Morgan Stanley, Merrill Lynch & Co. and Lehman Brothers Holdings Inc. led the Standard & Poor's 500 Index lower. Fifth Third Bancorp trimmed its dividend and announces plans to sell shares to boost capital. General Motors fell almost 6 percent to a 26-year low after Deutsche Bank reportedly lowered its price target on the auto maker by $3 to $17.
The S&P 500 dropped 11.19 points, or 0.8 percent, to 1,339.74 at 11:10 a.m. in New York. The Nasdaq Composite Index lost 27.31, or 1.1 percent, to 2,430.42. The Dow Jones Industrial Average decreased 91.59, or 0.8 percent, to 12,068.71.
Crude oil, which has backed off from nearly $140 a barrel over the past several days, which fluctuated between gains and losses following a new government report that showed oil stockpiles declined by 1.2 million barrels last week. In recent trading, oil rose 10 cents to $134.11 a barrel.
Shares of Morgan Stanley also sank, fell 6 percent after the investment bank said second-quarter profit dropped 60 percent, with the results emphasizing the ongoing credit crunch and dip in the real-estate market
FedEx fell $2.61 to $81.72. The company reported a fiscal fourth-quarter loss of $241 million, or 78 cents a share. Earnings excluding items were $1.45 a share, below the $1.47 forecast by analysts in a Bloomberg survey.
Hurt by record high fuel prices and weakness in the U.S. economy, FedEx's revenue plunged 8 percent from a year ago. Looking ahead, the company expects 2009 full-year earnings of $4.75 to $5.25 a share, well short of the $5.92 analysts had forecasted.