Source:  TheStreet.com

The Dow Jones Industrial Average was sinking 124 points at 8324, and the S&P 500 was losing 17 points at 854. The Nasdaq was down 23 points at 1522.

As expected, Citigroup and Morgan Stanley announced late Tuesday that Morgan Stanley would pay $2.7 billion for a 51% stake in a combined brokerage operation, the largest in the world.

Citigroup is expected to post its fifth straight quarterly loss, but first JPMorgan Chase will release its results on Thursday, a week ahead of schedule.

Companies — plagued by the economic downturn — continue scale back operations in reaction.

Software company Oracle has cut “several hundred” of its more than 86,000-employee workforce, according to two sources close to the situation, Reuters reported.

Also Nortel Networks is expected to file for bankruptcy protection as early as Wednesday, according to a report in Toronto’s Globe and Mail.

A storm of economic data was slated for Wednesday.

The Census Bureau said Wednesday that retail sales for December declined 2.7%, vs. an expected decline of 1.2%. Factoring out autos, retail sales declined 3.1%, vs. a 2.5% decline in the prior month and the expectation for a 1.4% decline.

The Mortgage Bankers Association said early Wednesday that the market composite index, a measure of mortgage loan application volume increased 15.8% on a seasonally adjusted basis to 1324.8 for the week ended Jan. 9. On an unadjusted basis, the index increased 95.7% compared with the previous week and 52.4% from a month prior.

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