Short sellers also made a run at the stocks in large industrial companies. Shares short in GM (GM) rose 9% to 114 million. The short interest in Dow Chemical (DOW) was up 28% to 39 million. Shares short in Corning (GLW) rose rose 33% to 26 million.

Media companies were hit hard by short sellers. The short interest in CBS (CBS) was up 20% to 47 million shares. Shares short in Gannett (GCI) rose 12% to 71 million. The short interest in in McClatchy (MNI) was 29% of the total float and share short in Lee (LEE) were 24% of its float. Twenty-five percent of the float in Cox (CXR) was sold short. At Media General (MEG) the number was 24%. Shares sold short in Yahoo! (YHOO) were up 8% to 43 million and shares sold short in Comcast (CMCSA) were up 5% to 54 million.

In the tech sector, shares short in Intel (INTC) were up 12% to 107 million. Shares sold short in Microsoft (MSFT) were up 14% to 92 million. Shares short in Cisco (CSCO) also rose.

Douglas A. McIntyre

Reuters says Obama is pushing for quick Wall St. reform.

Reuters reports that Citigroup (C) is close to reaching a deal with the government for a new investment in the bank

Reuters writes that the US may break up AIG (AIG)

Reuters writes that money managers were accused of running a $550 million scheme.

Reuters reports that RBS (RBS) unveiled a $34 billion loss.

Reuters reports that the CFO of Yahoo! (YHOO) said the company was not opposed to selling its search business to Microsoft (MSFT).

Reuters reports that UBS (UBS) appointed the former head of Credit Suisse (CS) as its new CEO.

Reuters reports that Bank of America (BAC) may sell one part of Merrill Lynch.

Reuters writes that Intel’s (INTC) CEO said that the company’s outlook was becoming more predictable.

The Wall Street Journal reports that the government has begun its “stress test” of banks.

The Wall Street Journal reports that Exelon said its $6 billion tender offer for NRG drew more than 51% of the shares outstanding.

The Wall Street Journal writes that Chrysler executives met with the Obama car task force.

The Wall Street Journal reports that home resales and prices dropped.

The Wall Street Journal reports that the first layoffs at Cisco (CSCO) began.

The Wall Street Journal reports that Nortal cut 3,200 more jobs.

The Wall Street Journal reports that Obama asked for a $312 billion tax bill mostly to raise the burden on the rich.

The Wall Street Journal reports that investors will turn their focus to GM (GM) earnings.

The Wall Street Journal writes that the Fed’s plans to loosen credit may be keeping some firms with large pools of toxic asset in business.

The Wall Street Journal reports that Nasdaq (NASD) is trying hard to get  listings from The New York Stock Exchange (NYX).

The Wall Street Journal reports that HSBC (HBC) earnings could show what is happening in the Asia economy.

The Wall Street Journal writes that Chinese pensions funds plan to increase foreign investments.

The Wall Street Journal reports that crude rose above $43 a barrel.

The Wall Street Journal reports that Apple’s (AAPL) defended the limited disclosure on the health of  Steve Jobs.

The Wall Street Journal writes that Visteon’s chances of a bankruptcy are increasing.

The Wall Street Journal reports that global chip sales are seen falling sharply.

The Wall Street Journal reports that sales of digital cameras are off 12%.

The Wall Street Journal reports that Gannett (GCI) cut its dividend by 90%.

The Wall Street Journal writes that the net at The Washington Post (WPO) plunged.

The New York Times reports that cities may not be prepared for the money for energy savings coming their way.

The New York Times reports that the US charged Forest Laboratories with fraud.

The New York Times reports that the FDA is considering much more disclosures on drug effects.

The FT reports that Saks will cut discounts on prestige brands.

Douglas A. McIntyre

The cuts at Motorola (MOT) were expected. The handset division which the company planned to sell-off is so badly damaged that the firm cannot part with it. Revenue at the cell phone unit fell by 31% and only 25 million handsets were shipped, less than half of what was going out the door two years ago. Motorola has already been though two series of “downsizing”, and another 3,000 people were sent out the doors today.

Legg Mason (LM), Fidelity, and AllianceBernstein (ABGS) each expects to let more than 3,000 people go. Given the turmoil in the financial services industry the news was hardly unusual.

Media companies are also expected to suffer more than the economy as a whole. Time Warner (TWX), Gannett (GCI), Yahoo! (YHOO) and Conde Nast all said they would make large cuts as their advertisers’ budgets are taken to bottoms not seen in decades in the auto, real estate, and employment sectors.

There was also very little surprise when analysts in the auto industry said that a GM (GM) merger with Chrysler would cost 35,000 jobs or more. It appears that the Federal Reserve or Treasury may put up as much as $10 billion to support a marriage which will do a great deal to undermine the employment bases and economies of Michigan and several other states with large numbers of auto workers. The situation is so severe that the industry must lose a leg to save the rest of the body.

The breathtaking parts of the list of companies cutting people are the plans at American Express (AXP), Electronic Arts (ERTS) and Whirlpool (WHR). At Amex, 7,000 poor souls are gone. The credit card company made $815 million in the last quarter.  Whirlpool had a modest drop in earnings to $163 million in the last quarter from $175 million a year earlier. At EA, 6% of the workforce will go. EA still expects to make EPS of as much as $1.40 this year on revenue of almost $5 billion. Each firm is facing a slowing of its business but not a catastrophe.

In a modest recession there is always an expectation that the companies in industries which are crushed by the cycle, which are usually financial, automotive, and airlines, will resort to cutting as many employees as they can and still operate at a lower capacity. Most other industries keep employment at reasonable levels in the expectation that extremely large expense cuts will undermine their capacities to take advantage of an economic recovery.

What the layoff news is showing now, in what is probably the second quarter of a recession which could last for six or seven, is that large corporations believe that their revenues will get much worse and that the chance for improvement is further into the future than most companies believe that they can reasonably gaze.

With each job that is lost at a company that is doing relatively well, the probable depth of the downturn gets worse. Many of the cuts being announced now are based more on confusion and fear than on reason.

Douglas A. McIntyre