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Stocks Slide Amid Economic Worries

Stocks got a quick pop from the better-than-expected July jobs report but it was all downhill from there: The gains quickly faded and losses deepened after a weak ISM manufacturing report.

General Motors was the biggest drag on the Dow Jones Industrial Average after the auto maker posted a worse-than-expected loss.

Market sage Art Cashin, director of floor operations for UBS, once again called for capitulation this morning on CNBC, saying it “might be more of a platypus bottom –- an unusual bottom.”

But Gordon Charlop of Rosenblatt Securities said don’t hold your breath.

“It’s feeling like a bottom a bit here,” Charlop said. “Maybe we’re starting to get to that spot where most of it, all of it is priced in -- We’re not going to see that washout” that everyone is looking for.

So, is it time to jump back into the market?

“I think you have to at this point,” Charlop said.

The big buzz of the morning was the jobs report.

Employers shaved 51,000 jobs from nonfarm payrolls last month, better than the 65,000-75,000 decline expected. Revisions to the prior two months showed a total of 26,000 fewer jobs were lost than previously expected. That brings the number of jobs lost so far this year to 463,000. (See a breakdown of job losses by sector.)

The unemployment rate, however, ticked up two-tenths of a percent to 5.7 percent, the highest rate in more than four years. Economists had expected the unemployment rate to come in at 5.6 percent.

Futures gradually pared gains as investors dug into the employment report.

"The headline payroll does not reflect the real story in the labor market, which is the alarmingly rapid rise in unemployment [rate] -- up 0.7% in just three months," Ian Shepherdson, chief U.S. economist at High Frequency Economics, wrote in a note to clients. Overall, this report was "pretty awful," Shepherdson said, but brace yourself -- it's going to get worse.

"[W]e're still waiting for a blockbuster plunge in headline payrolls," Shepherdson said. "It will happen, sooner or later."

Meanwhile, the Institute for Supply Management reported its gauge of manufacturing activity slippedtwo-tenths of a percent to 50 but came in slightly better than the 49 reading economists had expected. Readings over 50 indicate expansion, those below, contraction, so this one rides the line. A measure of new orders slipped -- economists had actually expected that to rise slightly after two regional reports this week showed an uptick in orders. Other components were slightly encouraging: Prices and inventories declined, while employment and production rose.

General Motors reported a loss of $15.5 billion, missing analysts' mark by a long shot, as North American sales tumbled 20 percent and SUV prices plunged.

Ford said its sales dropped 14.9 percent last month, more than the 11 percent analysts had expected, and that it expects the second half to be more challenging.

Major auto makers will release July sales numbers throughout the day.

Earlier, BMW issued a profit warning for 2008 and Nissan reported earnings that were much worse than expected.

Chevron reported its earnings jumped 11 percent, blowing past expectations, as record crude prices helped offset a loss from its refining operations. Sales jumped 49 percent.

Shares of drug maker Elan and its US partner Biogen Idec came under pressure after patients taking their jointly-developed multiple-sclerosis drug Tysabri developed brain diseases.

Markets in Asia ended mostly lower, with Tokyo down 0.2 percent.

Markets in Europe were also mostly down.