Mid-Day Report

The markets erased early morning gains to trade lower after Federal Reserve Chairman Ben Bernanke warned that a recession was certain without the $700 billion bailout plan.  The Dow dropped 71 points to 10,944 while Nasdaq fell 11 points to 2168.

On the upside

MannKind (Nasdaq: MNKD) reported upbeat late stage clinical trial results for its inhaled insulin system for Type 1 diabetes patients.

Downey Financial (NYSE: DSL), which posted a second quarter loss of $218.9 million, named Charles Rinehart to the position of chief executive replacing interim CEO Thomas Prince.

Shares of Sprint Nextel (NYSE: S) rose to lead telecoms higher.

On the downside

Piper Jaffray analyst Neely J. N. Tamminga downgraded specialty retailer Chico's FAS (NYSE: CHS) citing weak mall traffic and increased markdowns.

One of Hanger Othopedic Group's (NYSE: HGR) largest shareholders will sell 2.5 million shares of the company.

Dollar Thrifty Automotive Group (NYSE: DTG) warned that third quarter results will be hurt by vehicle depreciation costs, falling revenue and the bankruptcy of one of the company's tour operators.

In the broad market, declining issues outpaced advancers by a margin of nearly 2 to 1 on the NYSE and by more than 7 to 5 on Nasdaq.  The Russell 2000 which tracks small cap stocks tumbled 6 points to 715.