Wall Street Dips On Corporate Earnings Outlook

New York, NY (AHN) - U.S. markets pulled back in the second trading day of the year after 16 commercial banks saw their earnings forecast cut. The telecom sector also slumped on an analyst downgrade of Verizon and AT&T.

The Dow Jones Industrial average fell 82 points or 0.9 percent. 21 of 30 Dow components finished Monday with a loss.

JP Morgan Chase, down 6.8 percent was the main Dow laggard. The bank was one of 16 financial institutions to see its 2009 earnings forecast cut by Deutsche bank.

The S&P 500 fell 4 points or 0.5 percent. The financial sector weighed on the index, down 2.5 percent. Energy was the strongest sector, up 1.4 percent.

The telecom sector was the biggest laggard, down 4.6 percent after Bernstein Research downgraded both Verizon and AT&T due to a weak wireless outlook for 2009.

Tech held up best, the Nasdaq Composite fell just 4 points or 0.26 percent. Shares of Apple, up 4.2 percent, helped limit losses in the sector. Apple CEO Steve Jobs said a hormone imbalance was the reason for his weight loss, helping quell fears of his health that had weighed on the stock in December.

Oil rallied 4.4 percent due to the continued violence in the Middle East. The commodity added $2.47 a barrel to settle at $48.81 on the New York Mercantile Exchange.

In Corporate news, all the major automakers reported U.S. sales results for December. Toyota saw the worst decline with sales down 37 percent, followed by Honda Motor Corp., down 35 percent. Ford and General Motors reported declines of 32 percent and 31 percent, respectively.

For the year, General Motors sold 2.8 million vehicles, a level not seen since 1959. Toyota and Honda both reported their first yearly sales decline since the early 1990's.

In economic news, The Department of Commerce said construction spending for November fell 0.6 percent. The result was better than the 1.4 percent decline the markets expected, but still shows a contraction in overall building.

Tuesday's market will see the release of November factory orders along with ISM data for the services sector for December.