By Kate Gibson
Stocks on Wednesday declined sharply to new November lows as Treasury Secretary Henry Paulson shifted the focus of the government's bailout plan from troubled mortgage assets to consumer credit and Best Buy Co. Inc. cut its outlook.
"Investors are likely to see new lows in consumer sentiment this week," said Marc Pado, U.S. market strategist at Cantor Fitzgerald. "The outlook for this holiday season is as grim as anytime I can recall. Not even falling gasoline prices is helping sentiment."
Stock losses steepened as Treasury Secretary Henry Paulson laid out his strategy for the next stage of the financial-market rescue package, saying he has shelved a plan to buy troubled mortgage assets and is moving his attention to non-banks and consumer finance.
The Dow Jones Industrial Average was off 411.3 points to 8,282.66, with all but automaker General Motors Corp. (GM) in the red.
Shares of GM gained 5.5% after plunging to a 65-year low during Tuesday's session.
Paulson's comments on Capitol Hill came as Democratic leaders said they'll push legislation to use the $700 billion bailout fund to rescue General Motors and Chrysler.
"Bail GM out, but put restrictions on what they can build," said Pado. "There are electric cars out there that work. We need a plan that maintains jobs and gives us something we want in return. There would be no better 'homeland security' than to stop sending billions to the Middle East."
Off the Dow, shares of Ford Motor Co. (F) gained 2.2% amid the bailout talk. .
The remaining 29 blue-chip components posted early losses, with American Express Co. (AXP) sinking the most, down 10.5%.
The S&P 500 (SPX) declined 46.65 points to 852.3. The retreat proved broad-based, with financials, energy and consumer discretionary shares hit hardest, and utilities and health care -- often cast as defensive plays -- slammed the least.
The technology-laden Nasdaq Composite (RIXF) shed 81.69 points to 1,499.21, with shares of Google Inc. (GOOG) falling below $300 for the first time since late 2005.
On the New York Stock Exchange, volume neared 1.5 billion, with declining stocks passing those advancing roughly 10 to 1. On the Nasdaq, nearly 933 million shares traded, with decliners overtaking advancers 6 to 1.
Crude declines
Oil futures continued to slide, with concerns about a slowdown in demand pushing prices to a fresh 21-month low. Crude closed down $3.17, or 5.3%, to $56.16 on Nymex.
The dollar declined against both the yen and the euro. .
Gold also declined, with December futures off $14.5 to close at $718.3 an ounce. .
Treasury prices advanced, pushing yields to their lowest since 2003, as heightened fears about the economy weighed on stocks and increased the appeal of government debt. .
Best Buy Co. Inc. (BBY) fell 8% after the consumer electronics retailer cut its fiscal 2009 outlook.
Shares of Macy's Inc. (M) declined 11.1% after the retailer reported a third-quarter loss of $44 million, but stood by its full-year earnings outlook. .
Overseas, Russia's financial crisis appeared even bleaker, with dollar-denominated equities falling 12.5% and forcing the RTS stock exchange to halt trading once again.
The Nikkei 225 fell 1.3% in Tokyo. . In London, the FTSE 100 index fell 1.5%.
U.S. stocks dropped Tuesday as outlooks from luxury home builder Toll Brothers Inc. (TOL) and coffee retailer Starbucks Corp. (SBUX) illustrated softening consumer spending. The Dow industrials fell 176 points, the S&P 500 lost 20 points and the Nasdaq Composite dropped 35 points.
(END) Dow Jones Newswires
November 12, 2008 16:55 ET (21:55 GMT)

Publié le 12 novembre 2008 Copyright © 2008 Dowjones