Dow off 443 as slump deepens

By Charley Blaine and Elizabeth Strott

Stocks plunged again today, and the Dow Jones industrials suffered their worst two-day point loss ever.

The sell-off was a reaction to more signs of a worsening economic slump: rising jobless claims, weak retail sales in October and weak forecasts from the likes of Cisco Systems (CSCO, news, msgs) and News Corp. (NWS, news, msgs).

The Dow fell 443 points, or 4.9%, to 8,695. The Standard & Poor's 500 Index was off 48 points, or 5%, to 905, and the Nasdaq Composite Index was down 73 points, or 1,609.

The Dow has lost 929 points, or 9.7%, in the last two days alone. The percentage loss was its largest since 1987. The S&P 500 is down 10% in the last two days with the Nasdaq down 9.6%.

The news was no better after the close. Walt Disney (DIS, news, msgs) said bookings at its theme parks have declined "considerably" in the last month as the global economy has soured, and its shares slid 4.7% after hours to $21.75. The stock had closed down 5.9% in regular trading to $22.81.

Profits in its fiscal first quarter were also hurt by a weak advertising climate.

But early futures trading suggest the U.S. market may open higher, with the Dow up some 40 points. Asian markets opened lower, however.

Before Disney weighed in, retailers were mostly lower after reporting weak sales for October. Crude oil dropped below $61, pushing energy stocks lower.

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Concerns deepened that U.S.-based automakers may collapse. General Motors (GM, news, msgs) was the worst performer of the 30 Dow stocks, down 13.7% to $4.80. The company curbed development of a number of new vehicles. GM and Ford Motor (F, news, msgs) are expected to report huge third-quarter losses on Friday.

Analysts expect GM to lose $3.38 per share, with Ford posting a loss of 97 cents per share for the most recent quarter.

In addition, worries were growing about how bad Friday's report on unemployment and non-farm payrolls will be. The government data is expected to show nonfarm payrolls shed around 200,000 jobs in October and unemployment crept up to 6.3%.

Some analysts worry the payroll loss could be larger. Barry Ritholtz of The Big Picture blog thinks it could be 250,000 to 300,000, with unemployment hitting 6.5%.

"Obama's honeymoon with the markets was a short one as stocks unwound their Election Day relief rally . . . as the credit and financial mountain remains a tall one to climb," analysts at Action Economics wrote in a note to clients.

Crude oil in New York fell $4.53, or 6.9%, to $60.77, the lowest close since April 2007. Crude had been as low as $60.16 early in the day. Crude is now down more than 58% from its all-time high in July. Gasoline nationally averages $2.34 a gallon, down 2.5 cents from Wednesday and 43% from its peak of $4.114 a gallon in July, AAA's Fuel Gauge report said.

Energy shares were slammed hard. ExxonMobil (XOM, news, msgs) was down 5.1% to $69.96. Transocean (RIG, news, msgs), the offshore drilling company, was down 5.6%, to $75.85.

The sell-off was broad: all 30 Dow stocks were lower, along with 479 S&P 500 stocks and 92 stocks in the Nasdaq-100 Index ($INX), which tracks the largest Nasdaq stocks.

Financial, energy and technology shares were the weakest sectors of the S&P 500. They're also the biggest, ranked by market capitalization.

Coca-Cola (KO, news, msgs) was the best Dow performer, down just 0.5% to $44.49. Chemical producer Hercules (HCU, news, msgs) was the best S&P 500 performer, up 9.2% to $18.92 after shareholders approved a merger with oi and chemical company Ashland (ASH, news, msgs).

The Dow is off 34.4% for the year, with the S&P 500 down 38.4% and the Nasdaq down 39.4%.

The only good news in today's sell-off was that major indexes are still higher than their lows set in October.

How the market stands against its lows

Index	Thursday	Chg. From 2008 low	2008 low	Date
Dow Jones Industrial Average	8,695.79	10.32%	7,882.51	Oct. 10
Standard & Poor's 500 Index	904.88	7.65%	840.54	Oct. 10
Nasdaq Composite Index	1,608.70	7.69%	1,542.45	Oct. 24
Nasdaq-100 Index	1,241.97	8.08%	1,196.11	Oct. 24
Russell 2000 Index	495.84	12.20%	467.92	Oct. 28

Disney sees lower theme-parking bookings

Dow component Disney, the No. 2 U.S. entertainment company, reported a 13% decline in quarterly net income due in part to a bad debt charge. Revenue for the period, however, was $9.44 billion, up 6% from a year ago and ahead of the Wall Street estimate of $9.3 billion.

Disney said the advertising climate had softened the performance of its cable and broadcast networks.

While Disney said that its U.S. theme parks and resorts suffered under higher labor and fuel costs, attendance at its U.S. theme parks is down 1% so far in the current quarter. Bookings for the first two quarters of fiscal 2009 are down "a little under 10%" from last year.

"We are seeing a marketplace that is clearly tougher than it was in fiscal year 2008, and our ability to predict is very limited," CEO Bob Iger said.

Disney earned $760 million, or 40 cents per share, compared with $877 million, or 44 cents per share, a year ago.

Excluding one-time items, Disney earned 43 cents a share; Reuters said analysts had been expecting 49 cents.

Energy prices -- New York close

	Thur.	Wed.	Chg.	Month chg.	YTD chg.
Crude oil (NYMEX) (per barrel)	$60.77	$65.30	-$4.53	-10.38%	-36.68%
Heating oil (per gallon)	$1.9424	$2.0547	-$0.1123	-3.18%	-26.69%
Natural gas (per million BTU)	$6.9790	$7.2490	-$0.2700	2.89%	-6.74%
Unleaded gasoline (per gallon)	$1.3360	$1.4244	-$0.0884	-7.31%	-46.36%

Stocks weaken in Asia and Europe

In Asia, markets followed the U.S.'s big loss on Wednesday and tanked. Japan's Nikkei 225 Index fell 6.5%, and Hong Kong's Hang Seng Index shed 7.1%.

In Europe, stocks were lower as well, despite moves by both the Bank of England and the European Central Bank to cut interest rates. The Bank of England lowered its key interest rate by 1.5% to 3%, the lowest rate since 1955. The ECB cut its rate by half a percentage point to 3.25%.

London's FTSE 100 Index had fallen 5.7%, Germany's DAX 30 Index was down 6.8%, and the broader DJ Stoxx 600 Index was down 5.5%.

Cisco gives weak forecast

Cisco Systems late Wednesday reported the slowest quarterly growth in three years and gave a weak outlook for the current quarter.

The networking giant earned $2.2 billion, or 37 cents per share, in its fiscal first quarter. On an adjusted basis, Cisco earned 42 cents, topping Wall Street's estimate by 3 cents.

The company earned 35 cents per share in the same period a year ago.

Revenue rose 8.1% in the most recent quarter to $10.3 billion, but the company expects fiscal-second-quarter sales to fall as much as 10% from last year.

"It is the second-most difficult time in my career in terms of the forecast,'' Chief Executive Officer John Chambers said on a conference call with analysts. Chambers said sales also fell after the dot-com bubble burst in 2000.

Cisco also said it has instituted a hiring freeze for the current quarter.

Toyota halves full-year profit forecast

Japanese automaker Toyota Motor (TM, news, msgs) this morning reported a 48% drop in first-half profit and slashed its full-year outlook as global demand shrank. "The financial crisis is negatively impacting the real economy worldwide, and the automotive markets, especially in developed countries, are contracting rapidly," said Executive Vice President Mitsuo Kinoshita. "This is an unprecedented situation."

Toyota lowered its net profit forecast for its full fiscal year ending March 2009 to $5.5 billion, less than half of a previously forecast $12.6 billion and the worst profit decline in 18 years.

Shares of Toyota plunged 16.5% in New York to $67.09.

Meanwhile, top executives from Ford, General Motors and Chrysler were meeting with Speaker of the House Nancy Pelosi (D-Calif.) to talk about more financial help, according to published reports. Congress approved $25 billion in credits earlier this year to help transition the companies to fuel-efficient vehicles.

Wal-Mart's sales rise

One glimmer of hope this morning came from Wal-Mart Stores (WMT, news, msgs).

The discount retailer posted better-than-expected sales at stores open at least one year for October. Wal-Mart's sales rose 2.4% excluding fuel, topping analysts' expectations of a 1.6% increase. Including fuel, sales rose 2.5% last month.

Consumers continued to turn to the retailer for items like food and clothing, as Wal-Mart cut prices on many items last month.

Wal-Mart expects November same-store sales to rise between 1% and 3%.

Shares of the Dow component were down 1.2% to $53.49.

Other retailers didn’t fare as well.

Target (TGT, news, msgs) posted a worse-than-expected 4.8% decline in same-store sales, and Costco Wholesale (COST, news, msgs) said sales fell 1% -- worse than the 3.6% gain analysts expected. Target fell 6% to $35.47; Costco was down 0.4% to $53.51.

Luxury department store Saks (SKS, news, msgs) said same-store sales plunged 16.6%; shares fell 5.3% to $5.16. Gap (GPS, news, msgs) saw sales tumble 12% in October, and shares dropped 3% to $12.46.

"It will get more brutal," Stephen Hoch, director of Wharton Business School's Jay H. Baker division of retailing, told CNNMoney.com. "The further you move away from nondiscretionary issues the worse it's going to get."

Thomson Reuters expects October sales to be the worst in eight years.

Unemployment claims hit 25-year high

The number of Americans continuing to collect unemployment benefits jumped to 3.84 million, the highest level since 1983, the Labor Department reported this morning.

Initial jobless claims fell by 4,000 to 481,000 last week, the report said.

The initial jobless claims report comes one day before the Labor Department's October jobs report, which is expected to show that the economy shed 210,000 jobs last month -- which would make October the 10th month in a row of job losses.

"Expectations on employment are now for much more weakness than a few months ago when forecasts tended to hover around 75,000, so it can be said that the degree of preparedness for bad news has reached new heights," Miller, Tabak Chief Bond Strategist Tony Crescenzi wrote in a note to clients.

Among the companies planning to cut jobs are drug giant GlaxoSmithKline (GSK, news, msgs) and Advanced Micro Devices (AMD, news, msgs).

Glaxo late Wednesday said it is cutting its U.S. work staff by 1,000. Glaxo currently has about 8,500 sales workers in the U.S.; the company employs a total of 22,500 people in the country and 100,000 around the world.

Other drug companies that have recently announced layoffs include Merck (MRK, news, msgs) and Schering-Plough (SGP, news, msgs).

Shares of Glaxo were down 1.4% to $36.44 this afternoon.

Tech company Advanced Micro said it will eliminate 500 jobs in an effort to cut costs.

Advanced Micro shares fell 10.7% to $3.17.

Meanwhile, Bloomberg News reported that Goldman Sachs (GS, news, msgs) and Citigroup (C, news, msgs) started eliminating jobs this week.

Goldman began telling approximately 3,200 employees Wednesday that they would be out of their jobs; Citigroup plans to let 9,100 people go in the next year.

Citigroup was down 8.8% to $11.52; Goldman Sachs was off 7.7% to $80.72.

"We haven't hit bottom yet," Henry Higdon, managing partner at financial-services firm Higdon Partners, told Bloomberg. "They have to adjust the size of their businesses to the realities, not only today, but what it's going to look like in the next two or three years."

Wells Fargo to raise $10 billion

Wells Fargo (WFC, news, msgs) will sell $10 billion in stock to raise cash for its purchase of Wachovia (WB, news, msgs), the bank said late Wednesday.

Wells Fargo had planned to sell $20 billion worth of stock to fund the deal, which was originally valued at $15.1 billion when the banks agreed to it last month.

The offering will be priced today.

Last week, Wells Fargo received $25 billion from the government's capital purchase plan.

Shares fell 9.2% to $28.77.

Andrew Rosenbaum contributed to this report.

Short hits from the markets -- New York close

	Thur.	Wed.	Chg.	Month chg.	YTD chg.
Treasurys
13-week Treasury bill	0.315%	0.380%	-0.065	-27.59%	-89.97%
5-year Treasury note yield	2.487%	2.512%	-0.025	-11.84%	-28.02%
10-year Treasury note yield	3.707%	3.694%	0.013	-6.62%	-8.13%
30-year Treasury bond yield	4.200%	4.154%	0.046	-3.87%	-5.81%
Currencies
U.S. Dollar Index	86.460	85.130	1.330	0.13%	12.73%
British pound in dollars	$1.5584	$1.5598	-0.0015	-3.13%	-21.66%
Dollar in British pounds	£0.6417	£0.6411	0.0006	3.23%	27.65%
Euro in dollars	$1.2684	$1.2695	-0.0011	-0.51%	-13.22%
Dollar in euros	€ 0.7884	€ 0.7877	0.0007	0.51%	15.23%
Dollar in yen	97.45	97.47	-0.02	-1.19%	-12.87%
Canadian dollar in U.S. dollars	$0.835	$0.835	-$0.0005	0.92%	-15.91%
U.S. dollar in Canadian dollars	$1.198	$1.197	$0.0016	-0.89%	18.92%
Commodities
Gold	$732.20	$742.40	-$10.20	1.95%	-12.63%
Copper	$1.7255	$1.8190	-$0.09	-5.66%	-43.26%
Silver	$10.0550	$10.4550	-$0.40	3.34%	-32.61%
Corn	$3.7800	$3.9025	-$0.12	-5.85%	-17.01%
Crude oil (NYMEX) (per barrel)	$60.77	$65.30	-$4.53	-10.38%	-36.68%