Stocks Plunge on Layoff News

Stocks tumbled yesterday, weighed down by a series of layoff announcements from large corporations and continuing signs that the economy's woes are far from over.

In what has become a common pattern, the market plummeted during the final hour of trading after fluctuating between slight gains and losses for most of the day. The Dow Jones industrial average tumbled 215.45 points, or 2.5 percent, to 8376.24, while the Standard & Poor's 500-stock index fell 25.52 points, or 2.9 percent, to 845.22. The tech-heavy Nasdaq composite index was down 46.82 points, or 3.1 percent, to 1445.56.

General Motors took the biggest losses on the Dow yesterday, falling 16 percent to $4.11 a share as auto executives faced tough questioning before a Senate committee considering a bailout of Detroit's Big Three. Ford tumbled 6.7 percent to $2.66 a share.

Investors "are getting bailout fatigued," said Matt McCormick, portfolio manager and banking analyst at Bahl & Gaynor Investment Counsel. "If every sector of the economy is asking for a bailout: 'Why do I want to be in the equity markets right now?' "

Crude oil also continued its slide yesterday. It fell to $43.67 a barrel on the New York Mercantile Exchange, its lowest level since 2005. Already down 60 percent from its peak of $147 billion a barrel in July, analysts now predict oil could drop to $40 to $35 a barrel within months.

Investors have been battered by a series of poor economic data showing that the recession is deepening and impacting every sector of the economy. Data released yesterday showed that retail sales were down significantly in November and that U.S. factory orders fell 5.1 percent in October.

Adding to investors' concerns, analysts said, is that the country's unemployment picture is increasingly bleak. The number of workers filing new claims for jobless benefits fell to a seasonally adjusted 509,000 last week, down 21,000 compared with the previous week, according to the Labor Department. That was better than analysts expected, but still at recessionary levels.

Those figures set the stage for the Labor Department's monthly jobs report scheduled to be released today. Analysts expect that report to show the unemployment rate spiked to 6.7 percent in November.

Analysts said layoff announcements from large corporations indicate a rebound is not likely in the short term.

Shares of AT&T fell 3 percent and DuPont was flat after both companies announced yesterday they would cut thousands of workers. Banking giant Credit Suisse said it would slash 11 percent of its workforce, or about 5,300 jobs.