NEW YORK - Stocks finished moderately lower yesterday as further signs of economic deterioration dampened investors' enthusiasm about the Federal Reserve's record interest-rate cut.

Stocks declined early on after a larger-than-expected loss from Morgan Stanley offered fresh evidence of the obstacles the battered financial industry still faces. The company posted a loss of $2.37 billion, or $2.34 a share, for the fiscal fourth quarter. The report came a day after rival Goldman Sachs Group Inc. posted its first quarterly loss since going public in 1999.

Some selling had been expected after Tuesday's huge rally. The moves came after the central bank lowered its federal-funds-rate target to a range of zero to 0.25 percent.

But stocks struggled to hold on to the big gains logged the day before as investors grappled with signs of a worsening economy, including more layoffs and plunging oil prices, and the magnitude of the Fed's actions.

Still, despite yesterday's decline, investors have been rather resilient in recent trading sessions, an encouraging sign for analysts who say they believe the market might be stabilizing after the unrelenting selling of the last three months.

The Dow Jones industrial average fell 99.80, or 1.12 percent, to 8,824.34, after falling as much as 146 points. The Standard & Poor's 500 index slipped 8.76, or 0.96 percent, to 904.42, and the Nasdaq composite index fell 10.58, or 0.67 percent, to 1,579.31.

But the Russell 2000 index of smaller companies was up 3.74, or 0.77 percent, to 486.59.

Evidence of a still-weakening job market exacerbated investors' concerns. Cooper Tire & Rubber Co. said yesterday that it would cut 1,300 jobs and close a plant in Georgia, while Newell Rubbermaid Inc. is reducing its salaried workforce as much as 10 percent. It also slashed its fourth-quarter and full-year profit guidance.

Meanwhile, the fraud investigation of money manager Bernard L. Madoff progressed yesterday, as the Securities and Exchange Commission looked into the relationship between Madoff's niece and a former SEC attorney who reviewed Madoff's business.

SEC Chairman Christopher Cox blamed regulators for a decade-long failure to investigate Madoff, who is accused of running a $50 billion Ponzi scheme. Cox said staff attorneys never bothered to seek a formal commission-approved investigation that would have forced Madoff to surrender vital information under subpoena.

Some financial stocks rebounded late yesterday. After being down as much as 8 percent earlier, Morgan Stanley shares gained 37 cents, or 2.29 percent, to close at $16.50. Goldman Sachs added $2.78, or 3.66 percent, to $78.78.

Energy stocks slumped on falling oil prices. Chevron Corp. dropped $2.19, or 2.77 percent, to $76.82, while Exxon Mobil Corp. lost $2.08, or 2.50 percent, to $81.06.

Oil prices tumbled below $40 for the first time since the summer of 2004 yesterday despite an announcement from OPEC that it planned a production cut of 2.2 million barrels a day.