- The Washington Times - Monday, April 13, 2009

NEW YORK (AP) - Wall Street retreated Monday as traders speculated about the future of General Motors Corp. and awaited a flurry of earnings reports and data that could provide insight into the direction of the economy.

Major stock indicators fell as much as 1 percent, including the Dow Jones industrial average, which dropped about 80 points.

The slide came as Boeing Co. and Chevron Corp. said the weak economy was hurting their results. Several big banks bucked the trend as investors bought shares ahead of their quarterly reports in the coming days.

The selling after a long holiday weekend was orderly and suggested that cautious traders were reluctant to give up on a five-week rally. Traders could jump back into buying mode if the flurry of corporate earnings reports or economic figures due this week don’t come in as bad as feared.

Boeing fell 7 percent as analysts cut their ratings and estimates for the airline manufacturer after it said it would reduce production of some jetliners next year due. Chevron lost 3 percent after saying first-quarter earnings will be sharply lower due to falling oil and natural gas prices.

The market also was unsettled by a New York Times report saying the Treasury has directed General Motors Corp. to lay the groundwork for a potential bankruptcy filing by June 1. GM might be forced to file if it cannot complete a plan to exchange debt for equity, according to the report.

Investors are also looking to a spate of earnings results throughout the week, including reports from Goldman Sachs Group Inc., JPMorgan Chase & Co. and Citigroup Inc. Financial companies had been among the hardest hit by the economic downturn and credit crisis, but they have also helped lead a rally over the past month.

Goldman rose 3 percent, JPMorgan rose 0.5 percent and Citigroup rose 13 percent, while Bank of America Corp. rose 9 percent. Analysts said some of the buying could reflect traders stepping in to cover misplaced bets that banks would fall when they post results this week. Traders who sell stocks “short” are forced to buy to avoid further losses.

In early afternoon trading, the Dow fell 81.00, or 1 percent, to 8,002.38.

Broader stock indicators also slid. The Standard & Poor’s 500 index fell 4.59, or 0.5 percent, to 851.97, and the Nasdaq composite index fell 13.62, or 0.8 percent, to 1,638.92.

On Thursday, a surprise announcement by Wells Fargo & Co. that it will report a record quarterly profit for the first quarter helped send the market sharply higher ahead of the weekend. Markets were closed for Good Friday.

The Dow has rallied for five weeks, but last week showed increased volatility as investors prepared for earnings reports. The Dow lost 2.8 percent over Monday and Tuesday as investors became worried about potentially weak earnings reports. But after the Wells Fargo report Thursday, the Dow surged and ended up 0.8 percent for the week.

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