Stock fell sharply at the opening today, wiping out yesterday's rally spurred by the Fed's rate cut. The Dow was down by over 250 points in early trading, spurred by several bits of bad news, including an Exxon earnings plunge and a Citigroup downgrade. But the Wall Street Journal speculates that traders also had time to think about why the Fed thought a rate cut was needed. "The market's reflecting nervousness that there's another shoe to drop in the financial sector," says one trader.
Exxon posted a bigger-than-expected 10% drop in third quarter net income, and Credit Suisse said its quarterly net profits dropped 31% after a $1.9 billion writedown on mortgage-securities losses. Citigroup was downgraded to the category of "sector underperformer" by a CIBC World Markets analyst. And oil prices set another record at $96 a barrel.