Stocks tanked today as global economic realities more than offset the excitement over Sen. Barack Obama's election as the next president of the United States.
The Dow Jones industrials closed down 486 points, or 5.1%, to 9,139. It was the blue-chip index's worst loss on the first day after a presidential election, beating a 4.5% loss in 1932 after Franklin D. Roosevelt defeated Herbert Hoover.
The Standard & Poor's 500 Index was off 53 points, or 5.3%, to 953, and the Nasdaq Composite Index was down 98 points, or 5.5%, to 1,682.
Part of the market's tumble was due to profit-taking. The Dow had gained 17.7% in the prior six sessions, including Tuesday's 305-point gain. The S&P's gain over those six days had been 18.5%, with the Nasdaq up 18.2%.
But the larger problem was the economy. One report released this morning said announcements of layoffs nearly doubled in October from a year earlier. Another showed a larger-than-expected decline in employment.
Early futures trading suggests that U.S. markets will be stressed again on Thursday. A big reason: a dreary forecast fromafter today's close. The biggest maker of networking equipment forecast a 5% to 10% decline in quarterly revenue because of rapidly declining new orders.
Cisco shares had fallen 5.6% to $17.39 in regular trading -- its lowest close since July 2003 -- and were off an additional 5.6% to $16.42 after hours.
In addition,, which owns The Wall Street Journal, the New York Post and the Fox broadcasting and film empire, was off 11.4% to $8.80 in after-hours trading after reporting a 30% decline in quarterly earnings. The stock had fallen 9.7% to $9.93 in regular trading.
Cisco sees orders tumblingCisco Systems' CEO John Chambers, normally one of the sunniest executives around, said the company saw new orders drop rapidly in October.
Indications since then are that the trend will continue for a while, he told analysts this afternoon. The company cut its revenue forecast 5% to 10% from a year ago, which would translate into $8.6 billion to $9.1 billion. Analysts had been projecting a 5.1% revenue gain from a year ago to $10.3 billion. The quarter ends on Jan. 31.
Chambers said the business environment Cisco is facing is the "second-worst" in his career; the worst was after the dot-com bubble burst.
The company is instituting a "pause" in new hiring and cutting back on travel and other costs.
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Wall Street had expected 39 cents a share in earnings. Revenue was $10.33 billion, in line with Wall Street estimates and up 8.1% from a year ago.
Falling ad sales hit New Corp.Rupert Murdoch's News Corp. cut its full-year outlook as it posted a 30% decline in first-quarter profit.
The company cited declining advertising sales at its local television stations and the strengthening dollar. The company forecast that operating profits for its 2009 fiscal year will fall "in low-to-mid-teen" percentage terms. An earlier forecast had expected profits to grow 4% to 6%.
The company will be cutting costs across all of its businesses.
"All media companies are being tested, and the year ahead will be difficult," Murdoch said in a statement. News Corp.'s stock has fallen 61% since peaking in February 2007.
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A broad, but not panicky sell-offThe selling came on relatively light volume: 1.3 billion shares on the floor of the New York Stock Exchange; 1.8 billon shares is normal. Nasdaq volume was 2.2 billion shares, a touch under average.
All 30 of the stocks in the Dow were lower. The best performer was, down 1.7% to $64.52. Second was , down 2.8% to $5.56.
In addition, 485 S&P 500 stocks were lower, along with 95 stocks in the Nasdaq-100 Index ($NDX.X). The index, which tracks the largest Nasdaq stocks, was down 78 points, or 5.7% to 1,300.
The profit taking that hit U.S. stocks actually started in Europe, where stocks had been rallying solidly for a week. Britain's, which had jumped 20.4% between Oct. 27 and Tuesday, was off 2.3% today.
Financial stocks were the worst performers. The Dow laggards today were, down 11.3% to $21.75 and , down 14% to $12.63.
Meanwhile, steelmakers were hit after, the world's biggest steel producer, doubled production cuts on slower global demand. was down 10.5% to $35.50. fell 8.3% to $37.75.
Crude oil closed at $65.30, down 7.4% from Tuesday, after jumping 10% to $70.63 Tuesday. The cause was a report showing larger-than-expected U.S. gasoline supplies. Energy shares were mostly lower.was down 4.2% to $74.88.
Stocks had surged Tuesday as investors breathed a sigh of relief that the presidential election was finally under way. But there was no follow-up because Obama had been expected to defeat Sen. John McCain, R-Arizona. "Markets move on what is not expected and everybody was expecting this," Steven Goldman, market strategist at Weeden & Co., told CNN Money.
The jobs picture looks increasingly gloomyA report on October job cuts from outplacement firm Challenger, Gray & Christmas said employers announced plans to cut 112,884 workers last month, a 79% jump from the number of job cuts in the same month a year ago.
So far this year, employers have announced 875,974 job cuts.
"The fact that nearly three out of four industry categories are cutting more jobs is proof of how widely the impact of this downturn has spread," John Challenger, chief executive officer of the company, said in a press release. "A year ago, job cuts were concentrated in the financial sector and home-building industries. Job cuts are now rising across the board."
Meanwhile, a report from payroll services company ADP showed a decline of 157,000 jobs in the private sector in October -- down from a revised decline of 26,000 jobs in September, and worse than economists' expectations for 102,000 October job losses.
The Labor Department's October jobs report comes out on Friday. Economists are expecting it to show a loss of 200,000 jobs.
Service sector slumpsIn other economic news, the Institute of Supply Management nonmanufacturing index fell to a reading of 44.4 in October from 50.2 in September. That was worse than economists' expectations of 47.5.
Readings below 50 indicate contraction.
On Monday, the ISM manufacturing index slid to a 26-year low.
Google pulls out of Yahoo dealthis morning said it is walking away from an advertising partnership with because of antitrust concerns.
"It's clear that government regulators and some advertisers continue to have concerns about the agreement," David Drummond, Google's chief legal officer, said in a post on the company's official blog.
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The agreement between the two Internet companies was first announced in June.
Google shares fell 6.7% to $342.24 this afternoon. Yahoo shares rose 4.3% to $13.92; some traders were speculating thatcould come back into the picture. Microsoft was off 6.2% to $22.08. (Microsoft is the publisher of MSN Money.)
Time-Warner results disappointMegia giant tumbled despite meeting Wall Street estimates. The owner of Time-Life publications, Warner Bros. and Home Box Office earned $1.07 billion, or 30 cents per share, nearly in line with the $1.09 billion, or 29 cents, the company earned last year.
Analysts had expected Time Warner to earn 27 cents per share in the third quarter.
Time Warner lowered its full-year outlook to between $1.04 and $1.07 per share, down from previous guidance of between $1.07 and $1.11 per share.
Time Warner shares were down 6.3% to $10.15.Late Tuesday, pizza chain reported net income of $7.7 million, or 28 cents per share, up from the $4.8 million, or 16 cents per share, last year.
Excluding items, Papa John's earnings fell 18% to $7.9 million, also 28 cents per share -- down from adjusted earnings of $9.7 million, or 32 cents per share, a year ago, and below the consensus estimate for 36 cents per share.
The company also said it will likely report lower-than-expected earnings for the full year; Papa John's had forecast between $1.68 and $1.76 per share for the year.
"As with many restaurant and retail brands, we saw a slowdown in our sales starting in September that we believe was largely related to declining consumer sentiment," Papa John's Chief Executive Nigel Travis said in a statement.
Papa John's shares tumbled 16.2% to $19.16.
D.R. Horton sees a massive lossHomebuilder late Tuesday said it expects to lose between $800 million and $900 million in its fiscal fourth quarter -- the company's sixth consecutive quarterly loss amid the housing slump that has been plaguing the economy. On a per-share basis, the company will lose between $2.53 and $2.84, far worse than the expected 58-cent loss.
The quarterly loss will also be nearly 18 times worse than the $50.1 million loss D.R. Horton posted in the same period a year ago.
D.R. Horton will take a $1.1 billion charge for land, deposits and inventory.
The homebuilder also said home sales revenue slumped by half to $1.5 billion. The number of homes sold dropped to 6,961 in the quarter from 11,733 last year.
The company will officially report its results on Nov. 25.
Shares fell 0.9% to $6.81.
Andrew Rosenbaum contributed to this report.
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