Stocks lower

By THE WASHINGTON TIMES | Wednesday, October 22, 2008

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Stocks are falling sharply in early trading as investors focus on corporate earnings reports this week that show an indication of a slumping economy and casting fears of a painful recession.

In the first half-hour of trading, the Dow fell 279.25, or 3.1 percent, to 8,754.41.

All the major indexes are down at least 1 percent.

Some corporate earnings are offering the signs of dim conditions for the U.S. economy in the months ahead, and the global impact on world markets.

Wachovia Corp., the lender being acquired by Wells Fargo & Co., slid 3.6 percent after posting a $23.9 billion loss stemming from bad mortgages and the housing slump.

Drugmaker Merck & Co. said it will slash 7,200 jobs the next three years, as it has plunged 28 percent in its third-quarter profit and facing flat sales.

Yahoo plans to cut about 15,000 jobs, and shed 1,500 employees within the next two months. It's the second time the giant Internet company has resorted to mass layoffs in nine months' time.

On Tuesday, the Dow fell 231 points after forecasts from DuPont Co., Sun Microsystems Inc. and Texas Instruments Inc. raised fears that companies' outlooks for the fourth quarter and beyond could signal a severe economic downturn.

The Standard & Poor's 500 index futures fell 32.50, or 3.39 percent, to 926.80, and the Nasdaq 100 index futures fell 24.00, or 1.86 percent, to 1,268.50.

Meanwhile, credit markets showed more signs of improvement after virtually freezing up last week. Bank-to-bank lending rates fell sharply overnight, indicating that credit is becoming easier to obtain.

In world market news, the U.K. is facing its own grim job forecast.

Bank of England Gov. Mervyn King said Tuesday evening that "it now seems likely the U.K economy is entering a recession."

The London Interbank Offered Rate, or Libor, on three-month loans in dollars fell to 3.54 percent from 3.83 percent, dropping for an eighth straight day.

Meanwhile, credit markets showed more signs of improvement after virtually freezing up last week.

Bank-to-bank lending rates fell sharply overnight, indicating that credit is becoming easier to obtain.

Based on staff and wire reports.

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