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CNBC ON DIGG

Dow Down Over 200; VIX Pops Above 30

Published: Friday, 30 Oct 2009 | 2:30 PM ET

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By: Cindy Perman
CNBC.com

Stocks tumbled Friday, giving back all of the gains from the prior session, as worries about the recovery escalated after a pair of reports on the consumer.

In afternoon trading, the Dow Jones Industrial Average was down more than 200 points, or 2.2 percent. The Nasdaq shed 2.2 percent and the S&P 500 dropped 2.4 percent.

The CBOE volatility index, widely considered the best gauge of fear in the market, shot up 25 percent to about 31. With the market's recent rally, the gauge had fallen to near 20.

Major U.S. Indexes

.DJIA

.NCOMP

.SPX

This came after stocks logged their best day since July on Thursday, with the Dow jumping 2 percent.

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The sectors that have led the recent rally pulled back today: Financials, materials and energy were all down more than 3 percent.

All 30 Dow components were lower, led by Bank of America [BAC Loading... () ], JPMorgan [JPM Loading... () ] and Alcoa [AA Loading... () ].

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Carl Icahn, who had challenged CIT Group's [CIT Loading... () ] restructuring, jumped in Friday, saying he would provide an additional $1 billion in credit to the commercial lender.

This came after as CIT reached an agreement with Goldman Sachs [GS Loading... () ] to amend a $3 billion loan as part of a plan to restructure debt.

And Citigroup [C Loading... () ] may have to take another $10 billion in write-downs for deferred tax assets, banking analyst Michael Mayo said.

Some disappointing data on the consumer: Reuters and the University of Michigan reported their gauge of consumer sentiment slipped to 70.6 in a final October reading from 73.5 in September.

And the government said consumer spending fell 0.5 percent last month while income was flat. Separate reports showed employment costs rose and New York City's economic activity continuing to pick up.

Investors shrugged off an encouraging regional report: Business activity in the Midwest expanded in October to the highest level in more than a year, according to the Chicago purchasing managers' index.

On the earnings front, Chevron [CVX Loading... () ] reported its profit slumped 51 percent but beat expectations as the company pumped more oil out of the ground and prices began to recover.

This came a day after rival ExxonMobil [XOM Loading... () ] missed analysts' earnings target.

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AIG [AIG Loading... () ] said on Friday it would not sell its two Japanese insurers.

Intel shares [INTC Loading... () ] rose and there's been heavy options action on the stock amid optimism about the chip maker's forecast.

A few more techs delivered upbeat outlooks, including Sony, Panasonic and Samsung.

Sony [SNE Loading... () ] posted a fourth-quarter loss but cut its full-year loss forecast closer to market expectations, while rival Panasonic [PC Loading... () ] showed its first profit in three quarters while raising its forecast.