Wall Street On The Ropes

 

U.S. stocks were down for the count Thursday, sliding from the open and showing few signs of life on their way to a brutal finish.

Thursday's declines started modestly, before an afternoon free fall, after a batch of disappointing economic reports soured investors early in the day. The International Council of Shopping Centers said same-store sales at chain retailers were down 0.9% last month, their weakest October dating back to the index's inception in 1969. Retail stocks were reeling across the board, including Wal-Mart (nyse: WMT - news - people ), which lost 0.6%. The discount retailer actually recorded a 2.4% increase in sales, but it may be adding market share from rivals as consumers tighten their purse strings. The drop in sales at most retailers was even more of a concern considering the drop in gasoline prices, which have come down to a national average of $2.34 per gallon of regular, according to AAA. (See "Shop Till You Drop, Please.")

Meanwhile, the miserable reports keep coming from the job market. The Labor Department recorded 481,000 new jobless claims last week, and more than 3.8 million ongoing claims, spooking a market that is already anticipating a rocky October jobs report Friday.

The economic pullback had investors pulling out of U.S. equities in droves, without much concern for specifics. If there was anything positive to take from the decline, it was that it hit the entire market, not just one particular struggling sector, like financials. The Financial Select Sector SPDR (amex: XLF - news - people ) exchange-traded fund did slump 5.9%, but similar investments that track industrial, energy and consumer discretionary stocks fell as much, if not more.

The Dow Jones industrial average dropped 443 points, its second-straight slide of more than 400 points, to finish the day down 4.9%, at 8,696. The S&P 500 plunged 48 points, or 5.0%, to 905, and the Nasdaq tumbled 73 points, or 4.3%, to 1,609. The S&P appeared to find support right around the 900 level, while the Dow managed to hold the 8,650 level after falling below the mark earlier.

Investors are also anxiously watching the automotive industry, with the chief executives of Detroit's Big Three to pander for additional government aid. Rick Wagoner of General Motors (nyse: GM - news - people ), Robert Nardelli of Chrysler and Alan Mulally of Ford Motor (nyse: F - news - people ) were due to meet with House Speaker Nancy Pelosi and other lawmakers Thursday afternoon. Congress is expected to consider another stimulus plan in a few weeks, and automakers want it to include a $25.0 billion loan for them. (See "Why Ford Needs The GM-Chrysler Deal Done.")

The loan, which would bolster $25.0 billion that is already being guided into the auto industry by the Energy Department, would be aimed toward retooling and creating more efficient vehicles. GM is scheduled to announce its third-quarter results Friday, and the automaker is expected to report its cash burn rate is worse than anticipated. Fears that the automakers could run out of cash and be forced to cut jobs sent shares of GM down 12.2% Thursday. Ford shares shed 6.1%.