The markets retreated from early morning highs during the midday as Sprint Nextel announced job cuts and store closures. The Dow dropped 82 points to 12,078 while Nasdaq lost 5 points to 2342.

On the upside

An affiliate of Blackstone Group and Wellspring Capital Management will pay $1.3 billion to purchase Performance Food Group (Nasdaq: PFGC).

Xilinx (Nasdaq: XLNX) reported higher third quarter earnings that beat expectations by 3 cents due to strong demand.

Advanced Micro Devices (NYSE: AMD) reported a smaller than expected fourth quarter loss as the company reduced costs.

On the downside

Lazard Capital downgraded Advanced Life Sciences Holdings (Nasdaq: ADLS).

The FDA approved ZymoGenetics' (Nasdaq: ZGEN) blood clotting drug Recothrom but an analyst downgraded the stock over concerns pricing pressures will hurt product sales.

Banc of America Securites analyst Tamara Kravec downgraded MBIA (NYSE: MBI) saying that the company's credit rating will most likely by cut.

In the broad market, declining issues outpaced advancers by a margin of nearly 5 to 2 on the NYSE and by more than 2 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks tumbled 12 points to 668.