* Economic worries trump gains by retailers, telecoms
* Morgan Stanley recoups earlier losses
* Energy companies slip after oil falls below $40
* Dow, S&P 500, Nasdaq off 0.9 pct
* For up-to-the-minute market news, please click on
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(Updates to early afternoon, changes byline)
By Deepa Seetharaman
NEW YORK, Dec 17 (Reuters) - U.S. stocks fell on Wednesday
as pessimism about the economy overshadowed gains by retailers
and a recovery among financials.
Stocks fell as investors worried whether the Fed had any
more ammunition left after its bold move on Tuesday to slash
borrowing costs to a record low, even zero, while it pledged to
use "all available tools" to jumpstart the U.S. economy.
Apple Inc <AAPL.O> fell 6 percent on concerns over whether
the iPod maker had new products in the pipeline after the
company said Chief Executive Steve Jobs would not appear at the
company's technology conference. []
Energy companies also slipped as crude oil fell briefly
below $40 a barrel, the first time since July 2004.
Shares of Exxon Mobil <XOM.N> fell 1.2 percent to $82.01,
while Chevron Corp <CVX.N> edged down 1 percent to $78.07.
Financial stocks recouped earlier losses and added to sharp
gains a day earlier after an analyst said poor results from
Morgan Stanley <MS.N> will likely not be repeated. The call
helped lift shares of the Wall Street bank by 9 percent,
reversing an earlier decline after the bank reported a loss.
[].
"There's a lot of betting on financials taking place right
now," said Chip Hanlon, president of Delta Global Advisors in
Huntington Beach, California. "There is a feeling that maybe
the worst is behind us."
The Dow Jones industrial average <> fell 79.65 points,
or 0.89 percent, at 8,844.49. The Standard & Poor's 500 Index
<.SPX> edged down 7.81 points, or 0.86 percent, at 905.37. The
Nasdaq Composite Index <> slipped 13.73 points, or 0.86
percent, at 1,576.16.
U.S. crude oil futures fell after OPEC agreed on its
deepest output cut ever, but dealers said even that may fail to
offset slumping world energy demand. [].
Macy's Inc <M.N> was among the leading retailers, surging
17 percent after it said it obtained substantially more
liquidity from its banks. Shares of Motorola Inc <MOT.N> edged
up 1.6 percent after the company said it would suspend
contributions to the 401(k) worker retirement plan and freeze
its pension plan. []
The S&P Financials Index <.GSPF> changed course to edge up
0.8 percent after Ladenburg Thalmann's Dick Bove raised his
price target on Morgan Stanley. "It is assumed that in the next
few quarters, there will be fewer markdowns, operations will
improve moderately, and the asset management business will turn
profitable," Bove said.
"It is probable that many of the charges in this quarter
may not be repeated."
Macy's shares jumped 17 percent to $9.96, while Motorola
stock rose 1.6 percent to $4.48.
Food makers General Mills Inc <GIS.N> and ConAgra Foods Inc
<CAG.N> posted higher-than-expected quarterly profits helped by
price increases and expense controls. ConAgra shares surged
nearly 8 percent, while General Mills stock edged up 0.8
percent. []
(Additional reporting by Leah Schnurr and Charles Mikolajzcak;
Editing by Kenneth Barry)
