NEW YORK - WALL Street gave back some of its gains on Tuesday after negative outlooks from Texas Instruments Inc. and FedEx Corp. reminded investors that companies will be feeling the impact of the recession for some time.

FedEx cut its forecast for fiscal 2009 earnings and capital spending late Monday as the slumping economy cut into package deliveries. And chip maker Texas Instruments warned of a significant, broad-based deterioration in business and forecast fourth-quarter earnings and revenue substantially below earlier expectations.

Meanwhile, Japanese electronics maker Sony Corp. said it is slashing 8,000 jobs, or 4 per cent of its global work force, to cut costs by US$1.1 billion (S$1.65 billion) a year as the worldwide downturn batters profits.

The companies' announcements punctured some of the optimism that had investors buying the past two sessions, but some retrenchment was also to be expected after a big advance. The Dow Jones industrials rose 560 points over the course of Friday and Monday on expectations that government steps would help lift the economy.

'We did have a little negative news from companies like FedEx and Texas Instruments, and investors are using that as a reason to take a little bit of a break,' said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.

'We're digesting the fact that we've had a really nice rally.'

Investors are also waiting to see if lawmakers can come up with a US$15 billion bailout for General Motors Corp. and Chrysler LLC.

Negotiations were held through the night, and a deal might occur as early as Wednesday.

The proposal being worked on reportedly would give the government an ownership stake in the automakers. The market is concerned that a collapse of GM, Chrysler or Ford Motor Co. would trigger massive job losses, and further stymie the government's efforts to lift the US out of a recession.

In other corporate news, AutoZone Inc. reported fiscal first-quarter profit declined amid higher expenses and weak domestic same-store sales for the auto parts retailer. Delta Air Lines Inc. will get a $1 billion boost following a credit card agreement it reached with American Express Corp.

In early trading, the Dow Jones industrial average fell 97.33, or 1.09 per cent, to 8,836.85.

Broader stock indicators also declined. The Standard & Poor's 500 index fell 8.03, or 0.88 per cent, to 901.67. The Nasdaq composite index fell 11.70, or 0.74 per cent, to 1,560.04. -- AP