BY ALAN R. ELLIOTT Posted 10/15/2008 Indexes drove lower on worse-than-expected retail sales and business inventories data, and as energy issues continued to unwind as oil prices slipped lower. The NYSE composite had lost 5.8% at 11 a.m. EDT. The S&P 500 showed a 4.5% loss, while the Nasdaq composite and Dow gave up 3.2% and 3.8%. Alcoa (AA), Caterpillar (CAT), American Express (AXP) and Exxon Mobil (XOM) were the Dow's biggest price percentage losers. On the Nasdaq 100, heavy declines by Linear Technology (LLTC), Joy Global (JOYG) and Steel Dynamics (STLD) outweighed strong volume advances by Apple (AAPL), Intel (INTC) and Altera (ALTR). Trading volume was off sharply, down 40% on the NYSE and 32% lower on the Nasdaq. Crude oil slipped to a new 12-month low near $75 a barrel, giving the dollar a modest boost vs. the euro and the yen. Natural gas, grains and metals continued to down slide. Bonds edged higher and gold popped 16.50 to $854.60 an ounce. Commerce Department data showed an 0.3% increase in U.S. business inventories in August as sales fell 1.8%, the biggest decline in two years. That drove the key inventory-to-sales ratio to 1.27, building up from very low levels and up from 1.24 in July. Retail auto dealers inventories plunged 1.6%. In stocks, Wimm Bill Dann Foods (WBD) carved off a 9.75 loss to 52.75. The Moscow-based juice and dairy manufacturer and distributor had staged a three day rebound, rising nearly to its 50-day moving average. Wednesday's 15% drop nixed the effort. Joy Global plowed 4.34 lower to 27.51. The maker of mining and heavy-duty construction equipment is 45% below its 10-week moving average. On the upside, Hudson City Bancorp (HCBK) added 1.21 to 17.28 in immense trading after reporting a 64% jump in Q3 profit. The Paramus, N.J.-based regional bank topped consensus EPS views by a penny, largely on the continued strength of its home-lending business, despite the deepening financial crisis. The 7% jump launched the fifth day of a rebound from 10-month lows. Overseas, stocks dropped hard in Europe and the U.K. as confidence in the global financial rescue outlook fizzled. In the U.K., banks and commodities tanked, dragging London's FTSE 100 5% lower in late trading and nixing the market's two-day rebound. Frankfurt's DAX jettisoned 4.4% and the CAC-40 in Paris bombed 5%. In South America, Brazil's Bovespa toppled 6.1% in morning trading. Chinese markets closed lower after the country's regulators announced a broad range of economic measures, including raising the ceiling on mortgage loan lending to households. The State Reserve Board, the world's largest consumer of metals, also said it may increase its copper reserves by 74% over the next two years. The Shanghai composite held to a 1.1% decline. The Hang Seng index in Hong Kong suffered a 5% loss after a two-day, 14% rally. In Japan, defensive stocks like drug makers lifted the Nikkei 225 out of early losses to end 1.1% higher. 10:15 a.m. Update: Stocks Open Lower On Soft Volume BY VINCENT MAO Stocks opened lower and slumped further south early Wednesday on disappointing data and so-so results in the financial sector. At 9:57 a.m. EDT, the NYSE composite had fallen 3.8%, dragged down by energy issues. The S&P 500 lost 3.2%, while the Dow and Nasdaq gave up 2.6% and 2.1%, respectively. Volume was tracking sharply lower on both exchanges. Retailers were under pressure following a much wider-than-expected drop in September sales. Aeropostale (ARO) fell 5%, Buckle (BKE) 4% and Wal-Mart (WMT) 3%. Amazon.com (AMZN) shed 3.23 to 52.63 in fast trade. The Internet retailer continued to slide following a big reversal Tuesday. It reports earnings on Oct. 22. Analysts see profit rising 37% to 26 cents a share. Meanwhile, Linear Technology (LLTC) gapped down and slumped 5.04 to a six-year low of 20.85 in heavy trading. After Tuesday's close, the chipmaker posted an 18% rise in fiscal Q1 profit, beating views. But it warned that Q2 sales would fall 10% to 20% due to industry softness. On the upside, Genentech (DNA) gained 2.85 to 81.97 despite missing views and lowering the top end of its profit outlook. Late Tuesday, the biotech reported a 11% increase in Q3 earnings, below views. Sales grew 17%, above views. It also trimmed its full-year guidance to $3.40 to $3.45 a share from $3.40 to $3.50 previously. This morning, Piper Jaffray and Cowen and Company upgraded Genentech shares. The Fed's beige book of economic conditions will be out at 2 p.m. EDT. Crude oil dumped $3 points to $75.63 a barrel. 9:15 a.m. Update: Financials, Economic Data Hit Stock Futures BY VINCENT MAO Stock futures pointed to a lower open Wednesday following mixed results from several financials and disappointing economic data. Nasdaq futures dropped 25 points vs. fair value, S&P 500 futures fell 25 points and Dow futures lost 184 points. JPMorgan Chase (JPM) slipped 2% in the pre-market despite posting a surprise profit. The bank earned 11 cents a share during the third quarter, down from 98 cents the prior year but better than the 21-cent loss expected by analysts. The company warned of weakness ahead. "Given the uncertainty in the capital markets, housing sector and economy overall, it is reasonable to expect reduced earnings for our firm over the next few quarters," Chief Executive Jamie Dimon said in a press release. Wells Fargo (WFC) rose 1% in the pre-open after it delivered Q3 income of 49 cents a share, down 28% from a year earlier but 8 cents above views. The bank raised its allowance for credit losses by $500 million to $8 billion. Wells Fargo's recently announced buyout of Wachovia (WB) will be completed by the end of the year. State Street (STT) reported Q3 earnings excluding items of $1.24 a share, up 8% from the prior year and a nickel above views. On Tuesday, the asset manager and investment service provider was selected as one of the nine financial institutions to receive equity investments by the government. Shares fell 2% in the pre-market. Meanwhile, Coca-Cola (KO) rose 5% after it smashed views. Excluding items, the beverage giant earned 83 cents a share in the third quarter, up 17% from a year earlier and 6 cents ahead of views. Sales grew 9% to $8.39 billion, also above views but down from a double-digit pace in the prior six quarters. Rival PepsiCo (PEP), which missed views and announced layoffs Tuesday, rose 1% in the pre-market. In economic news, retail sales fell 1.2% in September, nearly doubling estimates for a 0.7% decline. Excluding autos, sales fell 0.6%, tripling views. Producer prices fell 0.4%, matching views. Excluding food and energy, wholesale prices climbed 0.4%, doubling estimates. Fed Chairman Ben Bernanke will speak on the economy and financial markets at 12:15 p.m. EDT. Crude oil dropped $2.64 to $75.99 a barrel ahead of the weekly energy inventories report at 10:35 a.m. EDT.

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