Even before the German penetration at the Losheimergraben angle, the 394th stood in danger of being cut off and destroyed piecemeal by the enemy infiltrating from the east and south. As part of a withdrawal plan put in effect during the afternoon for the entire division, General Lauer ordered the 394th to withdraw to a second defensive position at Murringen, about four kilometers in the rear of the regiment's eastern front.
The 2d Battalion, holding the north flank, was under pressure from both right and left. At dawn of 17 December, the enemy had attacked along the Neuhof road with tanks in the van. Company E, directly in the path, used its bazookas with such good effect that three panzers were crippled. Excellent artillery support and fine shooting by the battalion mortars helped discourage any further frontal assault. Infiltration on the flanks, however, had placed the 2d Battalion in serious plight when, at 1400, the order came to withdraw west and tie in with the 3d Battalion. Leaving a small covering force behind, the 2d Battalion started on foot through the woods, carrying its heavy weapons over the rugged and snow-covered trails. The Germans also were moving through the forest, and the battalion was unable to turn toward the 3d as ordered. Withdrawing deeper into the forest the battalion bivouacked in the sector known as the Honsfelder Wald. The covering force, however, made its way to Murringen, where it was set to defend the regimental command post.
The 1st Battalion, in the Losheimergraben sector, had been so splintered by incessant German-attack that its withdrawal was a piecemeal affair. Isolated groups fought or dodged their way west. Two hundred and sixty officers and men made it.  Two platoons from Company K which had been attached to the 1st Battalion did not receive word of the withdrawal and held on under heavy shelling until ammunition was nearly spent. It took these men twenty-four hours to wade back through the snow to the regimental lines. What was left of the 3d Battalion also fell back toward Murringen, harassed by groups of the enemy en route and uncertain as to what would be found at Murringen.
The survivors of the 394th Infantry now assembling at Murringen were given a brief breathing spell while the enemy concentrated on the 1st Battalion, 23d Infantry, defending the Hunningen positions 1,500 meters to the south. The 12th Volks Grenadier Division attack finally had broken through the American  The 1st Battalion of the 394th was accorded a Presidential Citation for its role in this battle. Page 94 line but now was definitely behind schedule. The 48th Regiment, having been much reduced in strength in the fight around Losheimergraben, re-formed on the high ground between the forest edge and Murringen. The north flank of the regiment lay exposed to counterattack, for the 277th Volks Grenadier Division on the right had been checked in its attempt to take the twin villages, Krinkelt-Rocherath. The fight now devolved on the 27th Regiment, which was ordered to take Hunningen before an attempt to roll up the American south flank.
Colonel Hightower's 1st Battalion was in a difficult and exposed position at Hunningen. His main strength, deployed to counter German pressure from the Buchholz-Honsfeld area, faced south and southeast, but the German columns taking the Honsfeld-Bullingen detour were moving toward the northwest and thus behind the Hunningen defenders. Whether any part of this latter enemy force would turn against the rear of the 1st Battalion was the question.