After suffering some uncertainty during morning trading on Wednesday, stocks are posting substantial losses in the mid-afternoon, lingering near their intraday lows. A great deal of the weakness comes as investors listen in on the testimony of the "big three" automakers to the House Financial Services Committee. The weakness is being exacerbated by a plethora of corporate and economic news.
In corporate news, General Electric (GE) revealed that it would save about $2 billion in 2009 after instituting a new organization structure for its finance arm GE Capital. Reports said the savings, equal to about 15% of the division's cost base, would come from staff and expense reductions as well as disposals of highly leveraged credit assets.
At the same time, the Wall Street Journal reported that Boeing (BA) is pushing back its delivery dates for all jetliners in its order backlog by 10 weeks after production was stopped for nearly two months due to a strike by the International Association of Machinists and Aerospace Workers.
On the economic front, the Labor Department released its report on consumer prices before the opening bell, showing that prices fell more than expected in October after coming in unchanged in September. The report also showed that core consumer prices dropped in October, surprising economists, who had been expecting core prices to increase.
Separately, the Commerce Department said that housing starts fell to an annual rate of 791,000 in October, while economists had expected starts to fall to 780,000.
Meanwhile, the CEOs of Ford (F), General Motors (GM) and Chrysler, along with the President of the United Auto Workers union are testifying before the House Financial Services Committee, warning that bankruptcy for the nation's automakers would have devastating effects on the U.S. economy.
While some Democrats in Congress have proposed that $25 billion of the $700 billion financial rescue package be given to the automakers, Republicans and the Bush administration largely oppose using the any of the TARP money for non-financial institutions and are encouraging seeking other sources of financing.
The major averages have moved roughly sideways in recent trading, lingering near their worst levels of the day. The Dow is currently down 244.92 at 8,179.83, the Nasdaq is down 62.01 at 1,421.26 and the S&P 500 is down 33.52 at 825.60.
Dow Components
Substantial losses being shown by the vast majority of the Dow components are driving the blue chip index lower. As its CEO begs for a financial rescue from the federal government, General Motors (GM) is suffering one of the widest losses of the Dow components.
Currently, GM stock is down 15.5 percent on the day, extending a recent downtrend that has taken the stock to its lowest level in several decades.
Steep losses are also being posted by Citigroup (C) and Bank of America (BAC), which are down 14.7 percent and 11.1 percent, respectively.
Alcoa (AA) JP Morgan (JPM), and General Electric (GE) are also posting notable losses. Shares of Alcoa are down 10.8 percent, shares of JP Morgan are 8.6 percent and shares of GE are down 7.1 percent.
While most of the other Dow components are also in negative territory, Hewlett-Packard (HPQ) is posting a modest gain. HP is adding to the strong gain it posted on Tuesday after providing upbeat guidance.
Sector News
Like the Dow components, the major sectors indices are following the trend of the broader markets, with the vast majority posting losses.
Some of the widest losses of the day are being shown by brokerage stocks. Currently, the Amex Securities Broker/Dealer Index is down 9.0 percent on the day, at its lowest intraday level in a decade.
Within the index, E*Trade (ETFC) is one of the biggest losers of the day, down 16 percent. The decline comes after the company announced that total retail customer assets fell $22.8 billion from September to total $119.4 billion, driven by the declining stock market.
Airline stocks are also suffering considerable losses, with the Amex Airline Index down 10.0 percent on the day, led by a 17.6 percent decline by JetBlue (JBLU) and a 16.5 percent decline by US Airways (LCC).
Real Estate, steel and banking stocks are also showing considerable losses. The Morgan Stanley REIT Index is down 8.9 percent, while the Amex Steel Index and the KBW Bank Sector Index are posting losses of 7.1 percent and 6.9 percent, respectively.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region closed lower on Wednesday, with Japan's benchmark Nikkei 225 Index ending the session with a loss of 0.7 percent on the day.
The major European averages also saw considerable weakness, ending the session near their worst levels of the day. The U.K.'s FTSE 100 Index close down 4.8 percent, while the French CAC 40 and the German DAX Index fell 4.0 percent and 4.9 percent, respectively.
In the bond markets, treasuries remain near their best levels of the day. Subsequently, the yield on the benchmark ten-year note is down 13.8 basis points at 3.397 percent.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.