Oil and Stocks Continue to Tank
Wall Street extended last week's sell-off Monday as stocks declined ahead of quarterly earnings reports expected this week and as another drop in oil prices weighed on energy stocks.
Wall Street is expecting fourth-quarter and full-year numbers to be particularly bleak, especially after several companies warned last week that they are being hit hard by the recession. Aluminum producer Alcoa Inc., which last week announced it would slash production, fell again Monday after an analyst lowered his rating on the stock ahead of the company's planned earnings release after the closing bell.
Oil fell below $40 a barrel as investors worried that a weak economy will hurt demand. That weighed on energy stocks. Financial stocks also declined as investors looked to Citigroup and Morgan Stanley, which could announce as early as Monday a deal to combine their brokerages. The potential tie-up underscores the troubles with tattered balance sheets that many banks still face.
Investors are also digesting comments from General Motors that the company has presented a worst-case scenario to Congress in which it would need more money than the $13.4 billion allocated by the Treasury Department.
