Stocks Tumble Again

Dow loses over 500 at closing

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Wall Street tumbled again Wednesday as investors shifted their focus from improving credit markets to worrisome corporate profit forecasts that are raising fears of a deep economic slowdown. The major indexes fell about 4 percent, including the Dow Jones industrial average, which lost 515 points, after swinging wildly in the final minutes of trading.

Corporate profit forecasts, a jump in the dollar and falling oil prices signaled investor fears that an economic slowdown will sweep the globe even if lending begins to approach more normal levels. While reduced strains in world credit markets have eased some investors' nervousness about the economy, market anxiety remains high as hundreds of companies this week release third-quarter results and in some cases fourth-quarter forecasts that offer a glimpse of the rough conditions that may lay ahead.

According to preliminary calculations, the Dow fell 514.45, or 5.69 percent, to 8,519.21, after being down as much as 698 points in the final half hour of trading. On Tuesday, the Dow retreated 231 points after forecasts from DuPont Co., Sun Microsystems Inc. and Texas Instruments Inc. raised fears about the economy.

Wachovia Corp., which is being bought by Wells Fargo & Co., said it swung to a huge loss in the third quarter while the drugmaker Merck & Co. said its quarterly profit fell 28 percent and that it would cut more than 10 percent of its work force.

Commercial and personal property insurer Travelers Cos. said hurricane-related losses pushed its third-quarter profit down 82 percent and forced it to lower its full-year forecast.

John Thornton, co-portfolio manager at Stephens Investment Management Group LLC in Houston, said investors' fear has shifted from the immediate concerns about tightness in credit and the resulting difficulty in borrowing to the broader economy as companies come out with their quarterly numbers.

"Even if it weren't for the credit crisis we'd probably be looking toward a pretty tough recession anyway," he said. 
Broader stock indicators also fell Wednesday. The Standard & Poor's 500 index fell 58.27, or 6.10 percent, to 896.78, and the Nasdaq composite index fell 80.93, or 4.77 percent, to 1,615.75.

Copyright AP - Associated Press
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