In corporate news, Target on Monday became the latest retailer to post dour results, citing lower sales at established stores as the reason for a 24% drop in profit. Lowe's Cos., meanwhile, said its third-quarter profit also fell 24%, better than expected, but it predicted a fourth-quarter profit below the average analyst forecast.
The reports follow a spate of disappointing earnings and forecasts from companies like Macy's Inc., Starbucks Corp. and Best Buy Co. as they battle a severe pullback in consumer spending. Investors fear that Americans' clampdown on spending — which accounts for about two-thirds of economic activity in the U.S. — will prolong a worsening economic slump.
On Monday, the Bush White House stressed that it steadfastly opposes drawing funds from the bailout plan to help the nation's automakers. The administration supports the idea of helping the struggling companies, but said the $25 billion that Democrats favor taking from the rescue plan should come, instead, from a Department of Energy program previously approved to develop fuel-efficient vehicles.
General Motors shares added 8 cents, or 2.66%, to $3.09. Ford slipped 5 cents to $1.75.
Meanwhile, the layoffs planned at Citigroup underscored the ongoing distress in the financial sector. The company said total headcount is being reduced by 20% from its peak of 375,000 at the end of 2007; the company had already announced in October that it was eliminating about 22,000 jobs from those levels. The New York-based bank has posted four straight quarterly losses, including a loss of $2.8 billion during the third quarter.
The fallout from this year's global credit crisis has claimed jobs on all corners of Wall Street, from hedge fund managers to floor traders and beyond. Some industry experts forecast the job losses could come close to 200,000 before the year is over.
On Sunday, Goldman Sachs Group said seven top executives, including Chief Executive Lloyd Blankfein, opted out of receiving cash or stock bonuses for 2008 amid the ongoing credit crisis.
Citi's leaders may also go without bonuses this year — a move that would effectively amount to a substantial pay cut for the company's executives.
Citigroup shares fell 65 cents to $8.87. Goldman sank $4.39, or 6.6%, to $62.34.
Government bond prices were higher as investors looked for safety. The three-month Treasury bill's yield fell to 0.10% from 0.14% late Friday, and the yield on the benchmark 10-year Treasury note fell to 3.68% from 3.72% late Friday. Lower yields indicate higher demand.