Stocks slide as economic troubles hit
Dow Jones falls more than 600 points on Wednesday, recovers slightly before day's end
Kate Gibson
Issue date: 10/23/08 Section: World News
NEW YORK (MCT) - U.S. stocks were pummeled again on Wednesday, as fears of a global recession sparked widespread selling of equities as well as commodities, with the Dow Jones industrial average tallying its seventh-largest point drop on record.
Worries of a worldwide recession stretched beyond the equities market, fueling more unwinding in the price of everything from oil, gold and copper.
"It's liquidation selling. On Monday and Tuesday there was much more discrimination in what was being done. Today is more like a going-out-of-business sale. We've decided to get in cash, so everything must go," said Art Hogan, chief market strategist at Jefferies & Co.
Falling as much as 690 points in the final 15 minutes of trade, the Dow Jones industrial average recovered slightly, ending at 8,519.21, down 514.45 points, or 5.7 percent.
All 30 of the blue-chip index's components ended lower, with the declines led by Alcoa Inc. off 13.4 percent.
"It's been a bad earnings season, and what companies tell us has not been inspiring. The news has been gloomy, and, if we believe executives, it is going to get even more gloomy," said Hugh Johnson, chairman of Johnson Illington Advisors.
Among the disappointing profit reports, Boeing Co. said a machinist strike helped push its third-quarter earnings down 37 percent.
Another Dow component bucked the negative trend, with fast-food giant McDonald's Corp. posting an 11 percent rise in third-quarter profit.
The S&P 500 declined 58.27 points, or 6.1 percent, to 896.78, with energy, financials and materials leading declines that stretched across all 10 of the index's industry categories.
Among the energy sector's greatest laggards, Consol Energy Inc. was off 22.3 percent.
"The third quarter of 2007 was the start of the earnings debacle," said Johnson, noting the 4.8 percent drop marked the first time in 22 quarters that the S&P 500's operating results showed a decline in earnings on a year-on-year basis.
Worries of a worldwide recession stretched beyond the equities market, fueling more unwinding in the price of everything from oil, gold and copper.
"It's liquidation selling. On Monday and Tuesday there was much more discrimination in what was being done. Today is more like a going-out-of-business sale. We've decided to get in cash, so everything must go," said Art Hogan, chief market strategist at Jefferies & Co.
Falling as much as 690 points in the final 15 minutes of trade, the Dow Jones industrial average recovered slightly, ending at 8,519.21, down 514.45 points, or 5.7 percent.
All 30 of the blue-chip index's components ended lower, with the declines led by Alcoa Inc. off 13.4 percent.
"It's been a bad earnings season, and what companies tell us has not been inspiring. The news has been gloomy, and, if we believe executives, it is going to get even more gloomy," said Hugh Johnson, chairman of Johnson Illington Advisors.
Among the disappointing profit reports, Boeing Co. said a machinist strike helped push its third-quarter earnings down 37 percent.
Another Dow component bucked the negative trend, with fast-food giant McDonald's Corp. posting an 11 percent rise in third-quarter profit.
The S&P 500 declined 58.27 points, or 6.1 percent, to 896.78, with energy, financials and materials leading declines that stretched across all 10 of the index's industry categories.
Among the energy sector's greatest laggards, Consol Energy Inc. was off 22.3 percent.
"The third quarter of 2007 was the start of the earnings debacle," said Johnson, noting the 4.8 percent drop marked the first time in 22 quarters that the S&P 500's operating results showed a decline in earnings on a year-on-year basis.
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