Dow Ends Within a Point of November Low

Stocks tumbled to November levels Tuesday as investors faced a fresh sign of the deepening recession and dilution worries gnawed at bank stocks.

The Dow Jones Industrial Average shed nearly 297.81 points, or 3.8 percent, to close at 7552.60, within one point of its November closing low. (The November intraday low, however, is about 100 points lower.)

The S&P 500lost 4.6 percent to close at 789.17,and the Nasdaq dropped 4.2 percent to close at 1,470.66.

>> Are We Headed for a New Low?

This comes after last week's 5.3-percent drop in the Dowas few details on the execution of the stimulus plan and worries about the potential for wiping out bank stocks weighed on the market. Financials were the week's worst performer, down 10 percent, while health care was the best, down just 2.4 percent.

"Today feels like another shot to the gut," Michael Farr, president of Farr, Miller & Washington, wrote in a guest blog post. But here's the news flash: "It's too late to panic," Farr wrote, suggesting it's time to buy.

"Play defense, but PLAY!" Farr wrote.

The latest sign of the deepening recession came from the New York Federal Reserve, which reported its Empire State manufacturing index fell to a record minus-34.65 from minus-22.2 in January. Economists had expected a much milder decline of minus-24. New orders fell to an all-time low.

This report from the New York Fed, along with a reading from the Philadelphia Fed later this week, is closely watched as a precursor to the national reading from the Institute for Supply Management, due out in two weeks.

Worries about more bank nationalizations also weighed on investors returning from the three-day weekend after markets were closed for Presidents' Day Monday.

Banks were again one of the biggest drags on the Dow, with Bank of America , JPMorgan and Citigroup all down more than 12 percent.

>> Pros Say: Prepare for More Bank Nationalization

This came amid a fresh wave of bank worries overseas after a report yesterday from Moody's indicated there could be more downgrades of European banks due to their exposure to Eastern European companies and governments and deteriorating economic conditions there. In the UK, Lloyds shares fell for the third straight session as investors worried that the bank will be nationalized.

Adding to the market jitters was news today that the SEC has charged Texas-based Stanford Financial Group with "massive ongoing fraud."

General Motors also lost more than 12 percent as the auto maker faces potential bankruptcy and a deadline today to submit restructuring plansto the government as part of its bailout agreement.

Shares of energy giants ExxonMobil and Chevron fell more than 4 percent as crude oil settled below $35 a barrel.

Wal-Mart was the lone gainer on the Dow, climbing 3.7 percent, after the retail giant beat earnings expectations, reporting fourth-quarter earnings excluding items of $1.03 a share; the Reuters consensus estimate was 99 cents a share. The discount chain projects full-year earnings of $3.45 to $3.60 a share.

>> Check the Dow scoreboard to see where all 30 components ended.

Stocks in Europe and Asia fell again, following a G7 weekend meeting accomplished little but the ousting of Japan's finance minister amid accusations he was drunk at a press conference and international criticism of the US stimulus plan.

Deere skidded 7.3 percent after Goldman Sachs became the latest brokerage to downgrade its rating on the stock as farmers struggle to get credit.

Elsewhere, another struggling industry, Atlantic City casinos, claimed a victim after Trump Entertainment Resorts filed for bankruptcy protection.

Sirius XM shares shot up after Liberty Mediaagreed to loan $530 million to the struggling satellite-radio provider, saving it from a potential bankruptcy filing.


Still to Come:

WEDNESDAY: Weekly mortgage applications; housing starts; import/export prices; Fed's Bernanke, Pianalto, Evans speak; industrial production; Fed minutes; Earnings from HP and Analaog Devices
THURSDAY: PPI; weekly jobless claims; leading indicators; Philly Fed survey; weekly oil inventories; Fed's Lockhart speaks
FRIDAY: CPI; Earnings from JCPenney and Lowe's


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