RTRS: US STOCKS-Wall Street ends lower as Fed optimism fades
* Optimism from Fed rate cut fades
* Apple slumps after Jobs cancels Macworld appearance
* Energy shares slip after oil dips below $40
* Dow off 1.1 pct, S&P 500 off 1 pct, Nasdaq off 0.67 pct
* For up-to-the-minute market news, please click on [STXNEWS/US] (Adds context)
By Chuck Mikolajczak
NEW YORK, Dec 17 (Reuters) - U.S. stocks fell on Wednesday as the government's effort to stave off a deep economic recession raised worries about mounting public debt and blunted optimism following the Fed's sharp rate cut on Tuesday.
Investors continued to weigh whether the Fed had any ammunition left after its bold move to slash borrowing costs to a record low near zero while it pledged to use "all available tools" to jump-start the U.S. economy.
"I think there is a worry about the huge amounts of debt and liquidity that is being placed in the system and that ultimately inflation will come up," said Robert Francello, head of equity trading for Apex Capital hedge fund in San Francisco.
Energy stocks were the top drag on the Dow after oil prices fell briefly below $40 a barrel for the first time since July 2004. Exxon Mobil (XOM.N: Quote, Profile, Research, Stock Buzz) fell 2.5 percent to $81.06, while Chevron Corp (CVX.N: Quote, Profile, Research, Stock Buzz) lost 2.8 percent to $76.82.
The Dow Jones industrial average .DJI shed 99.80 points, or 1.12 percent, to 8,824.34. The Standard & Poor's 500 Index .SPX fell 8.76 points, or 0.96 percent, to 904.42. The Nasdaq Composite Index .IXIC fell 10.58 point, or 0.67 percent, to 1,579.31.
However, advancing shares outnumbered declines on the NYSE by a ratio of about 3 to 2, while on the Nasdaq, the ratio was roughly even.
The Dow is down 37.7 percent from its record close in October of 2007 and 33.5 percent year-to-date.
Weighing on the Nasdaq, Apple Inc (AAPL.O: Quote, Profile, Research, Stock Buzz) slid nearly 7 percent after the company said Chief Executive Steve Jobs would not give the keynote address at the Macworld trade show, renewing concerns about his health. For details, see [ID:nN16287306]
The stock was subsequently downgraded and Oppenheimer removed its price target. [ID:nBNG379425]
Financial stocks were unable to sustain their gains despite an analyst note that said Morgan Stanley's (MS.N: Quote, Profile, Research, Stock Buzz) poor results announced on Wednesday were not likely to be repeated. The call helped lift shares of the investment bank by 2.3 percent, reversing an initial decline. [ID:nN17282690] Continued...
