Santa Claus May Skip Over Wall Street

WASHINGTON -- Wednesday's Christmas Eve session is scheduled to end three hours early before the Christmas holiday. Unfortunately for investors, there's been no sign of the proverbial Santa Claus rally.

Investors are waiting for more evidence Wednesday that consumers are spending less and companies are cutting jobs in the face of a deepening recession.

The Labor Department's tally of initial applications for unemployment benefits last week is expected to rise slightly.

Rounding out the week's scheduled economic reports, readings are also due on durable goods orders and personal income and spending.

Wall Street economists forecast that a November report on consumer spending will show a drop of 0.7 percent. That would be the fifth straight month of decline.

And the Commerce Department is expected to report that durable goods orders fell by 3 percent in November, after a 6.2 percent drop in October.

Tuesday, the government said the gross domestic product shrank at a 0.5 percent annual rate in the third quarter. GDP is the broadest measure of the economy.

That wasn't good news for the Dow. It lost 100 points to close at 8,419. The S&P fell 8 and a-half to 863 while the Nasdaq composite dropped nearly 11 points to 1,521.

World Trading Mostly Down

Except for key indices in Australia and Singapore, Asian markets stumbled again Wednesday after downbeat data about the U.S. economy showed the recession is deepening.

Japan's Nikkei 225 stock average dropped 206.68 points, or 2.4 percent, to 8,517.10, after being closed Tuesday for a holiday.

Shares in Toyota Motor Corp. tumbled 4 percent in their first trading day since Monday, when Japan's biggest automaker said it expected to post its first operating loss in almost 70 years. Automakers across the region were hit with heavy selling as well.

Hong Kong's Hang Seng Index closed down 0.3 percent to 14,184.14, while South Korea's Kospi lost 1.4 percent 1,128.51.

One analyst said investors are being hit with the reality of how poor the U.S. economy is.

Many investors found little reason to buy after reports released in the U.S. showed no signs of a turnaround in the world's largest economy, already in recession.

The government said third-quarter gross domestic product fell and the hard-hit housing sector also continued to deteriorate.

Wall Street futures point to a flat opening when U.S. markets open.