Stocks were down slightly on Wednesday as Citigroup (C) tidied up its troubled balance sheet by unloading $12 billion in loans and bonds.
Citigroup is selling the leveraged loans and bonds in a deal with private equity firms, which will pay slightly less than 90 cents on the dollar for the debt, according to the Wall Street Journal.
Also, United Parcel Service (UPS) said business is suffering from the weak economy and high fuel costs. It cut predictions for first quarter earnings by about 10%.
Meanwhile, Boeing (BA) may be forced to delay the first flight of its 787 Dreamliner. The jet manufacturer is reportedly set to announce a 15- to 17-month delay in the airplane program.
The global credit crunch has been a difficult time for private equity firms, but on Wednesday Apollo Global Management, a New York-based private equity outfit, filed plans for an initial public offering. The stock offering could raise $418 million.
On Wednesday morning, the Dow Jones Industrial Average was down 21.33, or 0.17%, to 12,555.11. The S&P 500 index fell 5.26 points, or 0.39%, to 1,360.28. The Nasdaq composite index fell 14.69 points, or 0.63%, to 2,334.07.
In trading on the NYMEX on Wednesday, oil prices were essentially flat, down 4 cents to $108.46 per barrel of WTI crude oil.
Among other stocks in the news, Circuit City Stores (CC) posted earnings of 34 cents per share, vs. a 4-cent loss a year ago. Lower expenses offset a 10% drop in same-store sales and a 7.7% fall in total sales. International sales, however, jumped 17%, helped by favorable foreign exchange rates.
Radian Group's (RDN) credit rating was lowered by Standard & Poor's Ratings Services from "A-" to "BBB." The insurer has been caught with exposure to the subprime mortgage market.
Arctic Cat (ACAT) says all-terrain vehicle sales are slower than expected and the firm has suffered from a parts supply issue, meaning the company now expects a loss in 2008 of 20 to 28 cents per share.
Sealy Corp. (ZZ) reported better-than-expected earnings of 17 cents per share, vs. 26 cents a year ago as revenue fell 5%. The firm suspended its quarterly dividend.
Invesco Ltd. (IVZ) said its average assets under management during the first quarter fell 6.5% to $476.6 billion, from $509.9 billion last quarter, with the global downturn in equity markets the main culprit.
Honeywell International (HON) says it won a contract, valued at more than $23 billion over its life, to supply turbofan propulsion systems to new business aircraft manufactured by Embraer (ERJ).
American Commercial Lines (ACLI) expects first quarter earnings-per-share be in the low single digits. The marine shipping firm blamed higher fuel prices, weather-related delays and a weak U.S. dollar, which has reduced commodity imports. Also, the firm's chief operating officer resigned.
Motorola (MOT) named David Dorman, a former chief executive at AT&T, as its chairman.
AMR Corporation's (AMR) American Airlines cancelled 850 flights on Wednesday, the second wave of cancellations so that the airline can reinspect wiring on MD-80 jets.
Major European indexes were mixed Wednesday. In London, the FTSE 100 index was up 0.34% to 6,010.60. Paris' CAC 40 index fell 0.25% to 4,900.51, and Germany's DAX index lost 0.17% to 6,760.34.
Stocks also fell in Asia, with Japan's Nikkei 225 down 1.05% to 13,111.89 and Hong Kong's Hang Seng index off 1.35% to 23,984.57.
Treasury market
Treasuries moved higher, as S&P's Marketscope says investors are betting the Federal Reserve will cut interest rates by a half-point later this month. The 2-year note was up 03-32 to 99-27/32 for a yield of 1.84%; ten-year notes gained 04/32 to 99-21/32 for a yield of 3.547%; and the 30-year bonds rose 06/32 to 100-02/32 for a yield of 4.3758%.