U.S. stock futures are trading mixed this morning, pointing toward a somewhat positive open, despite weakness on the Nasdaq due to poorly received earnings from Hewlett-Packard (HPQ). The leading PC and computer peripherals manufacturer reported a 13% plunge in first-quarter earnings after the close last night. Other companies in focus this morning include Whole Foods market (WFMI), which is 16% higher ahead of the open following solid quarterly results, and Sprint Nextel (S), which gained about 3% in pre-market activity due to a narrowed quarterly loss. Wall Street's mood could shift dramatically, however, as key economic data, including the January producer price index (PPI), are slated for release later this morning.

Checking in on currencies and commodities, the U.S. Dollar Index is taking a breather following a strong rally earlier this week. At last check, the index was off 0.92% at 87.19 in pre-market activity. Gold futures, meanwhile, have gained a mere $2.40 an ounce to trade at $980.60 in London, with traders closely watching the equity markets for signs of strength. Finally, crude oil futures are on the mend, with the March contract up 3.32% at $35.77 per barrel in electronic trading.

After the close last night, Hewlett-Packard (HPQ: sentiment, chart, options) reported a fiscal first-quarter profit of $1.9 billion, or 75 cents per share, compared with a profit of $2.1 billion, or 80 cents per share, last year. Revenue rose 1% to $28.8 billion from $28.5 billion. Excluding 1-time items, HPQ earned 93 cents per share. Analysts were looking for earnings of 93 cents per share on $31.9 billion in sales. For its second quarter, the company expects earnings of 70 cents to 72 cents per share, or an adjusted 84 cents to 86 cents per share. Sales should fall 2% to 3% from a year earlier, which would equal $27.5 billion to $27.7 billion. The figures were well below the current consensus estimate for 89 cents per share on $30.95 billion in sales.

Whole Foods Market (WFMI: sentiment, chart, options) reported that net income fell 17% from the year-earlier quarter due to slowing store traffic and legal costs. Whole Foods posted a first-quarter profit of $32.3 million, or 20 cents per share, down from $39.1 million, or 28 cents per share, last year. However, earnings topped analyst expectations for 19 cents per share. Sales were flat at $2.5 billion. Comparable-store sales fell 4% compared with a 9% gain last year.

Finally, Sprint Nextel (S: sentiment, chart, options) said it lost $1.62 billion, or 57 cents per share, narrowing its loss from the same quarter last year of $29.31 billion, or $10.31 per share. Revenue for the quarter was $8.43 billion, compared to $9.85 billion. Analysts had expected sales of $8.55 billion. "In tough economic times, we're generating substantial cash and reducing costs to ensure we remain financially sound. We already have the cash on hand to be able to meet our debt service requirements at least through the end of 2010," said Dan Hesse, Sprint Nextel chief executive.

Earnings Preview

Today, Apache (APA), CVS Caremark (CVS), Newmont Mining (NEM), and Crocs (CROX) are slated to step into the earnings confessional. Keep your browser at SchaeffersResearch.com throughout the day for more.

Economic Calendar

On the economic front, the Street must digest the January producer price index (PPI), the core PPI, January's leading economic indicators, the February Philadelphia Fed's manufacturing index, and the weekly reports on U.S. petroleum supplies and jobless claims. We round out the week on Friday with the consumer price index (CPI) and the core CPI.

Market Statistics

Equity option activity on the CBOE saw 1,251,244 call contracts traded on Wednesday, compared to 1,098,962 put contracts. The resultant single-session put/call ratio slipped to 0.88, while the 21-day moving average held at 0.75.

**The volume data shown above is from the Nasdaq and NYSE exchanges only. It does not include regional volume activity, which means that other daily volume quotes you see may be higher.**

The collapse of the stock market last year left corporate pension plans at the largest companies underfunded by $409 billion, reversing a $60 billion pension surplus at the end of 2007, according to a study released today.

Wall Street rose modestly in light post-holiday trading Friday, but was still cautious about embarking on a year-end rally following dreary preliminary readings on holiday spending.

Not surprisingly, Americans spent much less on gifts this season than they did last year, according to SpendingPulse, a division of MasterCard Advisors. Retail sales dropped between 5.5 percent and 8 percent compared with last year, the data showed, or between 2 percent and 4 percent after stripping out auto and gas sales.

Personal consumption is a huge part of U.S. economic activity - comprising more than two-thirds of gross domestic product - so Wall Street is nervous that a more frugal consumer could keep the economy weak in 2009.

Investors did get a some good news on Christmas Eve, when the Federal Reserve allowed GMAC Financial Services - the finance arm of struggling Detroit automaker General Motors Corp. - to become a bank holding company and thus qualify for the government's $700 billion rescue fund. Analysts had said that without financial help, GMAC might have had to file for bankruptcy protection or shut down

But so far, with just four trading days left in the year, no news has been upbeat enough to spark a year-end rally on Wall Street. December is usually a strong month for the stock market, with a flurry of trading known as a "Santa Claus rally" often seen in the month's final week.

In early trading, the Dow Jones industrial average rose 40.54, or 0.48 percent, to 8,509.02.

Broader stock indicators also advanced. The Standard & Poor's 500 index rose 4.18, or 0.48 percent, to 872.33, and the Nasdaq composite index rose 3.98, or 0.26 percent, to 1,528.88.

Trading volumes are expected to be extremely low on Friday as they were earlier this week. When trading is light, stock movements are often not indicative of broader market sentiment. Friday is also likely to be a quiet day of trading because there are no major economic or corporate reports scheduled.

Company of the Year: Nasdaq

Under CEO Bob Greifeld, NASDAQ OMX plays the stock trading game better than anybody.

The market has been open less than two hours and already 900 million or so shares worth $25 billion have changed hands. In a given second the total jumps by $3 million to $5 million--all without a sound. Unlike the New York Stock Exchange a few blocks away, this exchange has no shouting traders, no crumpled trade tickets on the floor. At the Nasdaq OMX Group, a single technician sits in front of eight flat-panel computer screens in a quiet operations center, 51 stories above the World Trade Center construction site. On one screen, quotes blink on and off at speeds barely visible to the human eye. On another, a fever chart showing orders and completed trades scrolls along like the electroencephalogram of an agitated 2-year-old.

To the extent that the Nasdaq market exists anywhere, it's within a single rack-mounted Dell server in a rented data center somewhere across the Hudson River. That machine routinely processes 70,000 orders, cancelations and trades per second but can handle up to 250,000 per second--enough to deal with trades on the Nasdaq plus the London and Paris stock exchanges with room to spare.

An entire trading floor crammed into a suitcase-size computer: That's the future of exchanges, and Nasdaq was there first, having been all-electronic--floorless, that is--since its inception in 1971. In the early days the trades were by telephone; since 1983 they have consisted of computer clicks.

With roughly 33% of the total volume in U.S. equities, and 2,500 employees, Nasdaq OMX is rushing to push more stock trades as well as futures, options and other derivatives onto its superfast, supercheap servers before competitors like NYSE Euronext catch up. "As you add scale, your incremental cost goes to zero," says Robert Greifeld, 51, a former computer salesman who took over at Nasdaq in 2003 as it was being spun out of the old National Association of Securities Dealers, now the Financial Industry Regulatory Authority. "Our goal is to add more incremental trades at zero cost."

In a year of spectacular market meltdowns, Nasdaq OMX Group has capitalized on the turmoil. It is our Company of the Year.

The chaos in financial markets--to say nothing of exploding volatility--has been a windfall for exchange operators. Combined U.S. trading volume on all exchanges averages 10.6 billion shares a day, compared with 4.2 billion two years ago and 1.5 billion a decade ago. The recent increase in volume is accompanied by an explosion in volatility: The CBOE Nasdaq Volatility Index, reflecting short-term expectations of volatility in the Nasdaq 100 Index, surged to 80 from 20 or so between mid-2006 and October of last year. At four-hundredths of a penny per share, Nasdaq takes in $800,000 in fees on a 2-billion-share day, just for pushing electrons through its servers.

But there's more competition for that traffic. A 2007 federal regulation ordered brokers to route their trades to the cheapest exchange, not the one that is most convenient. In Kansas City, Mo., Bats Exchange, a three-year-old competitor, now handles approximately 12% of U.S. volume, including 12% of the trading in Nasdaq-listed shares.

Traders are also doing 7% of their volume in "dark pools," the electronic equivalent of a back alley where buyers and sellers transact anonymously, according to Tabb Group, a Westborough, Mass. market researcher. "People used to talk about each stock having a principal exchange," says Daniel Mathisson, managing director in charge of a Credit Suisse division that uses computers to direct trades to the lowest-cost exchange at any given moment. "Now the trading's going all over the place, and there is nothing to stop that trend."

So Greifeld plays offense, using cheap technology to get business. In 2005 he paid $935 million for Instinet Group, one of the largest electronic exchange operators, chiefly to get his hands on the Island trading engine, particularly fast and inexpensive technology developed by a young Brooklyn, N.Y. entrepreneur in the mid-1990s. Within months Greifeld scrapped Nasdaq's expensive Tandem computers in a Connecticut data center and moved Nasdaq to off-the-shelf servers. "We have to have the same cost structure as the startups--we can't give any quarter," he says.

Wall Street proceeded cautiously Thursday, with stocks moving in a narrow range as investors weighed corporate earnings reports that signaled further economic deterioration, but drew some comfort from a better-than-expected reading on new jobless claims.

The Labor Department reported that initial jobless claims fell by more than economists anticipated to 554,000 last week. The claims remain near last week's 26-year high, and the four-week moving average for claims is up, but investors had been bracing for a gloomier reading.

However, a batch of mixed corporate earnings reports on Thursday kept investors on edge.

FedEx Corp. reported a 3 percent rise in quarterly earnings, but announced further cost cuts as demand continues to wane. Ingersoll-Rand Co. cut its fourth quarter earnings forecast by more than half, and motor home maker Winnebago Industries Inc. swung to a loss.

But Discover Financial Services swung to a profit and homebuilder Lennar Corp.'s quarterly loss was smaller than last year's.

Meanwhile, a private research group's measure of the economy's health fell again in November and its six-month rate of decline hit the worst level since 1991.

That reinforced perceptions that the economy's troubles are far from over. The market remains unsure how steep and prolonged the recession will be.

But investors seemed pleased that President-elect Barack Obama's aides were assembling a two-year stimulus plan that could cost $850 billion. The package would reportedly include new jobs, middle-class tax relief and expanded aid for the poor and the unemployed.

A stimulus for U.S. consumers became an especially high priority earlier this month, when the Labor Department reported that U.S. employers slashed more than half a million jobs in November.

Still, amid very light trading, stocks struggled to take a definitive direction.

"The economic data today was not as bad, but it wasn't great," said Jon Biele, head of capital markets at Cowen & Co. "You might see a little window dressing going on into year end, but the market is just churning."

In midday trading, the Dow Jones industrial average fell 38.71, or 0.44 percent, to 8,785.63. The Standard & Poor's 500 index rose 1.58, or 0.17 percent, to 906.00, while the Nasdaq composite index rose 4.39, or 0.28, to 1,583.70.

The Russell 2000 index of smaller companies rose 3.51, or 0.72 percent, to 490.10.

Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where volume came to just 482.74 million shares. Volume will likely remain light for the remainder of the year as investors break for the holidays.

On Wednesday, the Dow fell nearly 100 points as enthusiasm over the Federal Reserve's historic rate cut Tuesday dampened on news of a larger-than-expected loss at Morgan Stanley and layoffs at Cooper Tire and Rubber Co. and Newell Rubbermaid Inc.

In recent weeks, the market has moved away from the wild 300-point swings of September, October and early November, an encouraging sign for many analysts who believe Wall Street is beginning to show some stability.

Since the S&P 500 and the Dow hit multiyear lows on Nov. 20, the Dow has risen 16.8 percent, while the S&P 500 is up 20.2 percent. Both indexes are still down more than 30 percent for the year.

"People in general are less pessimistic," said Bernie McGinn, chief executive of Alexandria, Va.-based McGinn Investment Management. "They are still not optimistic, but they are less pessimistic, and I think the market reflects that."

McGinn also attributed some of the recent calm to the typical end-of-year slowdown - which is even more pronounced this year in comparison with the unprecedented turmoil of the fall.

"I think that people are getting into the holiday season earlier this year," he said. "People have been through the ringer this year and they just want the year to be over."

Biele echoed that sentiment, saying that investors are simply "exhausted."

"You can't really glean anything in this market right now," he said. "Everybody is still very much in cash. ... Nobody is going to make any bets right now."

On Thursday, Obama named three veteran regulators to round out his economic team and vowed to overhaul regulatory rules to prevent a repeat of the financial and economic turmoil the country is currently suffering.

If confirmed by the Senate, Mary Schapiro would take over the Securities and Exchange Commission. Schapiro, who currently heads a nongovernment regulatory group for securities firms, is also a former head of the Commodity Futures Trading Commission and former member of the SEC.

The SEC faces mounting criticism for its failure to protect investors and detect trouble on Wall Street. Its latest blemish comes from the fraud investigation of prominent money manager Bernard L. Madoff, who is accused of running a $50 billion Ponzi scheme.

Meanwhile, the Bush administration is seriously considering "orderly" bankruptcy as a way of dealing with the desperately ailing U.S. auto industry.

The White House is expected to soon unveil ways to provide emergency aid to the automakers, which have said they could run out of cash within weeks without government help.

The fate of Detroit's three biggest automakers was put in serious jeopardy last week after the Senate failed to pass a $14 billion bailout for Chrysler LLC and General Motors Corp. Ford Motor Co. has said in the past that it does not need government money to survive.

GM shares dropped 59 cents, or 13 percent, to $3.78. Ford shares tumbled 27 cents, or 8.6 percent, to $2.87. Chrysler is not publicly traded.

Energy stocks were also big decliners Thursday as the price of oil plunged below $38 a barrel. BP PLC dropped $1.91, or 3.9 percent, to $47.68, while Chevron Corp. fell $1.68, or 2.2 percent, to $75.13.

Discover's earnings report sent shares soaring 14 percent, or $1.22 to $9.80. Other credit card companies also rose. MasterCard Inc. added 45 cents, or 4.5 percent, to $10.46, while Capital One Financial Corp. rose 37 cents to $29.84.

Long-term Treasury prices soared, sending yields down to new record lows. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.12 percent from 2.19 percent late Wednesday. The yield on the popular three-month T-bill - whose yield has at times gone negative due to frenzied buying - was at 0.01 percent, unchanged from late Wednesday.

The strong surge in buying has been stoked by the Fed's decision Tuesday to lower its federal funds rate target to a range of zero to 0.25 percent, and express an interest in buying long-term government debt.

The dollar rose against the euro and the British pound, but fell against the Japanese yen. Gold prices declined.

Light, sweet crude fell $1.11 to $38.95 a barrel on the New York Mercantile Exchange.

In Asia, Japan's Nikkei stock average rose 0.64 percent, and Hong Kong's Hang Seng index rose 0.24 percent. In afternoon trading in Europe, Britain's FTSE 100 rose 0.15 percent, Germany's DAX index rose 1.02 percent, and France's CAC-40 fell 0.24 percent.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

Financial stocks helped New York's stock indexes edge higher at the open Tuesday, despite a multibillion-dollar loss from a Wall Street heavyweight. Meanwhile, consumer prices tumbled, according to government data, and new housing construction hit record lows.

All of the morning's news comes as the Federal Reserve wraps up its two-day monetary policy meeting, which is expected to conclude with another cut to benchmark interest rates. The fed funds rate currently stands at 1.0%, but the expected cut to 0.5% would be little more than a formality, since the effective fed funds rate has been trading below that level since mid-October. The central bank's statement will be closely watched for hints toward the Fed's next move, and perhaps a further expansion of its balance sheet through purchases of Treasury bonds or agency debt.

Before the Fed took center stage, Goldman Sachs (nyse: GS - news - people ) made the morning's biggest headlines, recording the first red ink in its 10-year history as a publicly traded company. The firm booked a loss of $4.97 a share, or $2.1 billion, as revenues tumbled across most of its businesses. The news did little to shake investors' faith though, as Goldman shares started the day up $3.00, or 4.5%, to $69.46. Rival Morgan Stanley (nyse: MS - news - people ), which reports fourth-quarter results Wednesday, tacked on 47 cents, or 3.5%, to $14.11.

Shortly after the open, the Dow Jones industrial average gained 55 points, or 0.6%, to 8,619. The Standard & Poor's 500 added 9 points, or 1.1%, to 878, and the Nasdaq was up 21 points, or 1.4%, to 1,529. Volumes were light as investors treaded water before the Fed's statement.

The Labor Department said its Consumer Price Index came in at -1.7% for November, thanks in large part to cheaper oil prices. Excluding fuel and energy costs, the index was unchanged from the month before. The inflation gauge has cooled considerably since the summer, when record fuel costs sent the reading on a dizzying rise. (See "Consumer Prices Take A Dive.")

Crude oil was up 33 cents Tuesday, but still trading at just $44.84 a barrel. United States Oil Fund (nyse: USO - news - people ), an exchange-traded vehicle that tracks crude and other products, gained 84 cents, or 2.3%, to $37.68 early in the session. (See "OPEC: All Eyes On Russia.")

On the housing front, the Commerce Department recorded 625,000 housing starts in November, down 18.9% from the October estimate, and off 47.0% from November 2007. New building permits were at 616,000, down 48.1% from the year before, while housing completions were just below 1.1 million, 22.8% below the year-prior figure. But the drop in starts can be taken as a blessing in disguise, since the glut of inventory that home builders face will be helped by fewer new homes on the market.

Wall Street was scuffling Monday afternoon, as cautious investors shied away from equity markets with the future of the U.S. auto industry in flux and the Federal Reserve's monetary policy committee gathering for a two-day meeting.

Investors are still waiting to hear if the Treasury will use Troubled Asset Relief Program funds to aid Detroit, after a $14.0 billion loan package for the car companies was shot down by the Senate. Judging by trading in the shares of publicly traded U.S. automakers General Motors (nyse: GM - news - people ) and Ford Motor (nyse: F - news - people ), investors don't expect the White House to allow them to fail. GM shares were up 19 cents, or 4.8%, to $4.13 Monday; Ford gained 9 cents, or 3.0%, to $3.13. Chrysler, which would have received $4.0 billion in loans under the rejected plan, is privately held.

The struggles facing the industry are not limited to the domestic automakers either. Japan's Toyota Motor (nyse: TM - news - people ) is said to be halting work on a Mississippi plant designed to build its hybrid Prius, once the current phase of production is completed, according to TradeTheNews.com. American depositary receipts of Toyota, which has already pumped $300.0 million at the Mississippi plant, were up $2.34, or 3.7%, to $65.54.

Aside from the positive automaker stocks, it was a red day on Wall Street. The Dow was down 83 points, or 1.0%, to 8,546; the S&P 500 lost 13 points, or 1.5%, to 866; and the Nasdaq fell 34 points, or 2.2%, to 1,507. Investors also had their eyes on the Fed, with expectations the central bank will take its benchmark interest rate down another half point, to 0.5%.

The move would be mostly symbolic, since the effective fed funds rate has been below the 0.5% threshold since October. Market watchers will be more interested in the statement accompanying the decision, which may hint at other methods of easing monetary policy beyond cutting rates, such as investments in Treasury bonds or expanded purchases of Fannie Mae (nyse: FNM - news - people ) and Freddie Mac (nyse: FRE - news - people ) debt.

Treasury yields inched lower Monday, as investors moved out of stocks and into the perceived safety of government debt. The two-year note returned 0.75%, down from 0.77% Friday, while the 10-year note offered 2.54%, from 2.57%. The iShares Lehman 10-20 Year Treasury Bond Fund (nyse: TLH - news - people ), which tracks a range of long-term bonds, was up 50 cents, or 0.4%, to $118.37.

Earnings will come back into focus this week, with reports from Wall Street survivors Goldman Sachs (nyse: GS - news - people ) and Morgan Stanley (nyse: MS - news - people ) on the agenda. Goldman, which is expected to report the first quarterly loss in its 10-year history as a public company Tuesday, was down $1.40, or 2.1%, to $66.34, in afternoon trading. Morgan Stanley lost 27 cents, or 2.0%, to $13.58, ahead of its report Wednesday.

Oil prices reversed course from early gains, as traders weigh the impact of an expected production cut from the Organization of Petroleum Exporting Countries. The cartel will gather in Algeria Wednesday, and is expected to slash output by at least 2.0 million barrels. Crude, up more than $3.00 earlier in the day, fell $1.33, to $44.95 a barrel.

News of a rapidly weakening job sent stocks falling Friday as investors feared that the recession will be deeper and more prolonged than many have expected. The major indexes were all down more than 1 percent and the Dow Jones industrials fell 180 points.

The Labor Department's report that employers slashed 533,000 jobs in November came in much higher than the 320,000 that economists forecast. The job losses were severe enough to add to expectations that Washington will have to take even bigger steps to boost the economy.

Although stocks fell after the report, analysts said Friday's retreat likely would have been steeper if the market hadn't tumbled in the final hour of trading Thursday in anticipation of a weak reading.

"What we're seeing here is the market telling you that a downward drop in employment was somewhat expected," said Craig Peckham, equity trading strategist at Jefferies & Co.

"In a kind of paradoxical sense, the really ugly employment numbers probably helped the case for more help from Washington, whether it's through the broader stimulus plan or more targeted industry measures."

Job losses were widespread, hitting manufacturing, construction, retail, financial and other sectors. It was the biggest monthly loss of jobs since 1974.

While the rise in the unemployment rate wasn't as steep as the 6.8 percent forecast, investors clearly believe the employment outlook remains bleak - especially as the layoffs keep coming. On Thursday, bellwether companies like AT&T Inc. and DuPont Co. announced they were cutting thousands of jobs.

The fear on Wall Street is that a rising unemployment rate will, among other things, lead to a more severe pullback in consumer spending, which is a crucial component to helping the economy rebound. Weak retail sales reports for the month of November released Thursday added to these concerns.

"The news is consistently dreadful and is likely to remain so for some time as layoffs continue and economic reports come in," said Gary Townsend, president and chief executive of private investment group Hill-Townsend Capital Inc.

In midmorning trading, the Dow Jones industrial average fell 180.40, or 2.15 percent, to 8,195.84 after falling 216 points Thursday.

Broader stock indicators also declined. The Standard & Poor's 500 index fell 17.93, or 2.12 percent, to 827.29, and the Nasdaq composite index fell 24.08, or 1.67 percent, to 1,421.48.

The Russell 2000 index of smaller companies fell 8.42, or 1.92 percent, to 431.11.

Five stocks fell for every one that rose on the New York Stock Exchange, where trading volume came to a moderate 302.2 million shares.

Bond prices showed modest movements Friday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, inched up to 2.57 percent from 2.56 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.02 percent from below 0.01 percent late Thursday, but still indicated extreme fear among investors.

The dollar rose against other major currencies, while gold prices fell.

Light, sweet crude fell $1.71 to $41.96 a barrel on the New York Mercantile Exchange. Concerns about the economy and weakening energy demand have kept oil prices down near four-year lows. The price of oil has fallen a staggering 70 percent since peaking at $147.27 in July.

Independent investment strategist Edward Yardeni said Friday's employment snapshot confirms the nation is mired in a difficult recession but that the extent of the weakness likely will galvanize government officials.

"The number was a shocker to such an extent that it's clearly going to require an enormous stimulus response from Washington," he said. "Cleary the Fed and the Treasury are going to move even faster."

The Federal Reserve and the Treasury have been taking unprecedented steps to revive the economy since the mid-September bankruptcy of Lehman Brothers Holdings Inc. Other programs have sprung from the government's $700 billion bailout of the banking sector. The Treasury said Thursday it is considering a plan to encourage banks to make mortgage loans at low rates. That could help patch up the troubled housing market, which many analysts say is crucial to any economic recovery.

Wall Street has reacted with both optimism and indifference in recent months as policymakers have tried to revive troubled credit markets and stabilize wobbly banks. Some analysts have been hopeful that relative quiet in the markets for more than a week portends a return of some stability because of the government's efforts, while others warn that the volatility in the market will continue.

"The markets are, in my view, acting not stable at all but with excessive volatility and unpredictability," Townsend said. "It's a very difficult market to invest into and a very difficult market to trade."

Part of investors' uncertainty centers on the automakers. Investors are observing a second day of congressional hearings with the heads of Detroit's top three automakers, who are appearing on Capitol Hill in an effort to save their troubled industry.

General Motors Corp., Ford Motor Co. and Chrysler LLC are collectively seeking $34 billion in emergency funding. While the market largely expects the companies will win some sort of government aid, support for the troubled carmakers isn't assured. Friday's jobs report likely put added pressure on lawmakers to offer a lifeline that would let the companies avoid bankruptcy.

GM fell 5 cents, or 1.2 percent, to $4.06, while Ford rose 9 cents, or 3.4 percent, to $2.75. Chrysler isn't publicly traded.

Meanwhile, Merrill Lynch & Co. shareholders approved the investment bank's sale to Bank of America Corp. early Friday, in a move that will create the nation's largest financial services firm.

Bank of America agreed to buy Merrill for $50 billion after the collapse of rival investment firm Lehman Brothers Holdings Inc. in September raised doubts about the viability of independent investment banks in general. The value of the all-stock deal has since fallen to about $20 billion, based on Bank of America's Thursday closing price of $14.34.

Bank of America shareholders were set to vote on the acquisition at 11 a.m. EST. The deal is expected to close during the first quarter.

Optimism that buoyed some overseas markets following massive interest rate cuts across Europe Thursday deflated following the report on U.S. jobs. In afternoon trading, Britain's FTSE 100 fell 2.26 percent, Germany's DAX index fell 4.71 percent, and France's CAC-40 declined 5.72 percent. Japan's Nikkei stock average slipped 0.08 percent on the day.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

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December got off to a rough start for equities in general, with the Standard & Poor's 500-stock index down nearly 9%, to 816, on the first day of the month. But wireless carrier Sprint Nextel (S) saw its stock hammered much more than any of the major averages, with shares down 24%, to 2.11.

Why the drubbing? The only news Sprint announced for the day appeared to be relatively benign. The company said it had finalized a previously announced deal to combine its next-generation wireless broadband business with Clearwire (CLWRD), a Kirkland (Wash.) company that's building its own wireless broadband business. By combining the two operations, the companies figure they'll be able to roll out service faster and save on expenses in the process. In addition to Sprint's contribution of assets, Clearwire received $3.2 billion in funding from a number of backers, including Intel (INTC), Google (GOOG), Comcast (CMCSA), and Time Warner Cable (TWC).

Trouble is, that may not be enough money. When the Sprint-Clearwire transaction was originally announced back in May, Clearwire expected to be able to offer its service to 120 million to 140 million people by the end of 2010. But the buildout plans assumed that, in late 2009 or in early 2010, Clearwire would be able to raise an additional $2 billion to $2.3 billion. With the capital markets virtually closed, Clearwire may not be able to raise that money and its rollout schedule may have to be modified. "My preference would be that we continue moving along at the same pace, but that we look at the capital markets on a quarter-by-quarter basis," says Benjamin Wolff, chief executive of Clearwire. Wolff says Clearwire's board could decide to change its buildout schedule when it convenes in early 2009.

Network Access Denied?

Any slowdown by Clearwire could cause Sprint problems. As a Clearwire investor and customer, Sprint plans to buy access to Clearwire's network at wholesale prices and then resell the broadband Internet service to its own customers. If Clearwire's board decides to scale back its ambitions, Sprint may have to wait longer than anticipated to gain access to a high-speed network. (Sprint has two of the 13 seats on Clearwire's board.) That could slow down Sprint's ability to attract new broadband subscribers. Meanwhile, rivals like Verizon Wireless could launch their high-speed networks around 2010.

A Sprint spokesman says the company would "not discuss movements in our stock." He referred questions about the pace of Clearwire's buildout to the Kirkland company.

It's just one of the many challenges Sprint is facing. The company, once renowned for high-quality service, has suffered setbacks in customer service and other quality issues since its merger with Nextel in 2005 (BusinessWeek, 2/21/08). Customers have defected and losses have piled up. The company's stock has fallen from nearly 16 a share last year, a drop of 85%. And Standard & Poor's (which like BusinessWeek is owned by The McGraw-Hill Companies (MHP)) cut the credit rating for Sprint to below investment grade back in May.