-- A cocktail of bitter economic news from overseas, Silicon Valley, the malls and the labor front soured investors on stocks Thursday and led to the second consecutive day of selling.
The Dow Jones industrial average skidded 443.48 points, or 4.9%, to 8,695.79, a painful pullback following a 486-point, or 5.1%, decline Wednesday. After this one-two punch of selling, the Dow finds itself back down 34% this year and less than 7% above the closing low set this year at 8176 on Oct. 27.
The broader Standard & Poor's 500 didn't fare much better, losing 47.89, or 5%, to 904.88. Shares of companies in commodity-related businesses such as coal and aluminum, as well as commercial real-estate, led the slide. The NAsdaq composit eindex dropped 72.94, or 4.3%, to 1,608.70.
A pullback was to be expected because the market rallied nearly 18% between Oct. 27 and Nov. 4, says Joseph Saluzzi of Themis Trading. Investors remain concerned over how long and how severe the global economic slowdown will be, he says. Still, much more a slide would be troubling. "You don't want to go back to the lows," Saluzzi says.
The negative news was relentless. Stocks in Britain, Germany and France sold off by 5% or more after rate cuts by central banks in Europe. The Bank of England cut short-term interest rates by 1.5 percentage points and the European Central Bank took its primary rate down by half a percentage point. Investors worry these rate cuts indicate just how challenged the European economy remains.
Meanwhile, retailers released October sales figures that show a severe pullback among consumers. Wal-Mart Stores wmt reported a better-than-expected 2.4% rise in October sales at stores open for at least a year, but investors are worried about other specialty retailers; Limited Brands ltd, for example, posted a worse-than-expected drop in sales.
Tech-networking leader Cisco Systems late Wednesday reported weak sales in October. Several retailers, especially those that sell apparel, reported weak sales in stores open at least a year.
Japanese automaker Toyota Motor reduced its annual earnings forecast Thursday to less than a third of what it was in previous fiscal year.
And the job picture continued to worsen Thursday. The number of people collecting unemployment benefits rose 122,000 to 3.84 million in late October, the highest level since Feb. 1983.
Evidence of the slowing global economy is painfully clear in the vicious sell-off of oil. The price of a barrel of crude fell $4.36, or 6.7%, to $60.94 as the slowing economy curtails demand for fuel.
Interbank lending rates did fall for the 19th straight day, a sign that banks are becoming more willing to lend. The London Interbank Offered Rate, or Libor, for three-month dollar loans dipped to 2.39% from 2.51%.
The Russell 2000 index of smaller companies fell 18.80, or 3.65%, to 495.84 on Thursday, bringing its two-day decline to 9.2%.
Declining issues outnumbered advancers by about 5 to 1 on the New York Stock Exchange, where volume came to 1.53 billion shares. Analysts noted that the volume of the week's declines has been light, indicating that investors aren't rushing to sell positions.
The dollar traded mixed against most other major currencies, while gold prices fell.
Light, sweet crude fell $4.53 to settle at $60.77 a barrel on the New York Mercantile Exchange as fears of a slowing economy led to predictions demand will fall.