A day off in the middle of the week is always a bit of a lurch, and this morning, it looks like the stock market is suffering a case of the post-holiday blues. With both China and the European Central Bank cutting key rates, central banks are clearly worried that prospects for the global economy look dire. Many are also blaming the decline on a worse-than-expected reading on the Institute for Supply Management's gauge of activity in the U.S. services sector, which followed a reading earlier in the week that suggested contraction in manufacturing activity. In any event, investors seem worried, and by 10:45 a.m. EDT, the Dow Jones Industrials (INDEX: ^DJI ) were down 47 points, while the S&P 500 saw a similar percentage drop.
Among Dow stocks, JPMorgan Chase (NYSE: JPM ) was the big mover, falling more than 4%. Adding to the company's recent woes were reports that the bank is being investigated both in connection with the LIBOR-fixing scandal as well as potential manipulation of the energy markets. Continuing fallout from analyst Meredith Whitney's downgrade of the stock also points to further weakness ahead for JPMorgan. Investors need to look forward to next Friday's earnings report, which should give more clarity about the true impact of JPMorgan's problems on its bottom line.
Also down was Intel (Nasdaq: INTC ) , dropping more than 1%. Rival AMD (NYSE: AMD ) suffered from an analyst's rating cut, which cited a slowing PC market as a headwind for AMD. Clearly, Intel would also have problems in a PC slowdown, despite its efforts to try to diversify and strengthen its presence in the mobile space.
Gainers were in short supply, but McDonald's (NYSE: MCD ) rose more than 1%. With the company having so much exposure to international markets, it stands to gain the most from coordinated action to stimulate the global economy. However, it could also see profits shrink if rate cuts abroad lead to further strength in the U.S. dollar.
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