Stocks Hit 2-Week Low Amid Global Worries
Stocks fell to their lowest levels in two weeks as worries about a global slowdown spooked the market.
The Dow Jones Industrial Average shed 176.58, or 2 percent, to close at 8693.96, its lowest close since Oct. 27. Twenty-nine of the 30 Dow components finished lower; the only advancer was Pfizer .
The S&P 500 index and Nasdaqeachlost 2.2 percent.
Trading volumes were light as the U.S. bond market was closed for the Veterans Day holiday. Roughly 1.23 billion shares changed hands on the New York Stock Exchange, compared with the daily average of 1.9 billion.
Energy stocks skidded nearly 3 percent after crude fell below the key $60 levelas traders anticipated that the global recession would carve steep cuts into demand.
Materials stocks lost nearly 4 percent, while consumer-discretionary and retail fell more than 2.5 percent.
U.S. auto makers pulled into the center of a political storm as President-elect Barack Obama urged outgoing President George W. Bush to support immediate emergency aid for the struggling sector.
Analysts remained divided on the benefit of bailing out auto makers, wondering if the U.S. is embarking on a bottomless pit of bailouts.
General Motors was the biggest drag on the Dow, falling 13 percent. Rival Ford lost 6.7 percent.
Rounding out the top three Dow decliners, Alcoa tumbled 7.1 percent after the company again slashed its aluminum-making capacity, citing faltering global demand, and American Express dropped 6.6 percent after the credit-card provider received approval to become a bank-holding company.
Tyco tumbled 14 percent after the industrial conglomerate warned that it would miss Wall Street's 2009 forecast, hit by the economic downturn and stronger dollar.
Citigroup sought to stem the flow of home repossessions by becoming the latest mortgage lender to try to help borrowers stay in their homes. The bank launched a program aimed at vulnerable borrowers, which it said could refinance $20 billion home loans. Its shares fell 3.7 percent.
Toll Brothers finished slightly lower after the luxury home builder projected a 41-percent drop in revenuefor the fiscal fourth quarter, thwarting signs of stability the company said it saw in September.
Meanwhile, Goldman Sachs advised clients to bet against bonds which it sold on behalf of the state of California, the Los Angeles Times reported. The company didn't let the office of California Treasurer Bill Lockyer know that it was proposing a way for clients to profit from California's economic downturn, the paper said.
Goldman Sachs shares, which hit a five-year low on Monday, rebounded 4.9 percent.
TJX , which operates TJ Maxx and Marshall's stores, reported its profit fell 5 percent and slashed its 2009 forecast. Shares fell 1.1 percent.
It's a big week for retail earnings and it's not expected to be pretty. Still to come: reports from Macy's , Wal-Mart and others.
It's a tough time to sell a $5 cup of coffee: Ubiquitous coffee chain Starbucks said its profit plunged 97 percent from a year earlier as the cost of closing stores chugged all but a penny of profits. Excluding those costs, the barista earned a dime a share. Shares fell 2.1 percent.
British mobile-phone group Vodafone cut its full-year revenue outlookfor the second time in four months on Tuesday but said it would maintain profits and boost free cash flow by cutting 1 billion pounds ($1.6 billion) of costs.
American depositary shares of the Vodafone jumped 6.6 percent.
TUESDAY: Government offices, bond market closed for Veterans Day
WEDNESDAY: Weekly crude inventories; Fed's Stern speaks; Earnings from Macy's, Applied Materials
THURSDAY: Weekly mortgage applications; weekly jobless claims; international trade; Fed's Plosser, Stern speak; Treasury Budget; Earnings from Wal-Mart, Nordstrom, Kohl's
FRIDAY: Import/export prices; retail sales; business inventories; consumer sentiment; natural-gas inventories; Earnings from Abercrombie & Fitch, JCPenney
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