Stocks Retreat as Economy Contracts

The U.S. economic recession deepened in the 4th quarter contracting by 6.2% which was worse than expected. The Dow lost 111 points to 7070 while Nasdaq fell 13 points to 1378.

On the upside

Shares of Leap Wireless (Nasdaq:LEAP) rose sharply after the wireless service provider posted a wider 4th quarter loss.

Hansen Natural (Nasdaq: HANS) reported a 4th quarter loss due to one-time charges related to a change in distributors.

Deckers Outdoor (Nasdaq: DECK) posted higher 4th quarter profits, but the maker of UGG footwear also offered a flat outlook for 2009.

On the downside

Citigroup (NYSE: C) will cede control to the U.S. government giving up as much as a 36% equity stake in a preferred debt conversion deal.

Top executives at Wells Fargo (NYSE: WFC) will forgo cash bonuses for 2008 due to poor performance, but raised their annual based salaries and granted restricted stock rights to them.

Software maker Autodesk (Nasdaq: ADSK) posted a 4th quarter loss and lower revenues as demand sagged in the media and entertainment sector. An analyst promptly downgraded the stock.

In the broad market, declinig issues outpaced advancers by a margin of nearly 4 to 1 on the NYSE and by more than 3 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks lost 5 points to 387.