- The Washington Times - Thursday, November 13, 2008

NEW YORK | A disheartened Wall Street fell for the third straight session Wednesday as investors absorbed another series of dismal corporate reports and news that the government won’t buy banks’ soured mortgage assets after all. The Dow Jones Industrial Average dropped more than 410 points, and all the major indexes lost more than 4 percent.

The stock market has lost about $1 trillion over the past three days, according to the Dow Jones Wilshire 5000 index, which reflects the value of nearly all U.S. stocks.

The market started the day falling in response to more signs that companies are being hurt by a severe pullback in consumer spending. Macy’s Inc. said it lost $44 million in the third quarter as sales at the department store retailer fell more than 7 percent. And consumer electronics retailer Best Buy Co. slashed its fiscal 2009 guidance on fears that consumer spending will erode even further.

Meanwhile, Morgan Stanley, reeling from the ongoing losses on Wall Street, outlined plans to cut 10 percent of staff in its institutional securities group - its biggest business that covers everything from investment banking to stock trading.

The bleak reports, which followed disappointing news from coffee retailer Starbucks Corp. and home builder Toll Brothers Inc. earlier in the week, made it increasingly clear to investors that companies throughout the economy are suffering from the aftermath of the housing and credit crises.

There was more pain at midmorning, when Treasury Secretary Henry M. Paulson Jr. said the government’s $700 billion financial rescue package won’t purchase troubled assets from banks. He said that plan would have taken too much time, and that the Treasury instead will rely on buying stakes in banks and encouraging them to resume more normal lending.

The Dow shed 411.30, or 4.73 percent, to 8,282.66. It was the lowest close for the Dow since its 5 1/2-year low of 8,175.77 reached on Oct. 27.

According to the Dow Jones Wilshire 5000 Index, Wednesday’s paper losses amounted to about $600 billion. By that measure, the stock market has shed $9.1 trillion since the index’s Oct. 9, 2007, peak.

The broader Standard & Poor’s 500 Index dropped 46.65, or 5.19 percent, to 852.30, and the Nasdaq Composite Index stumbled 81.69, or 5.17 percent, to 1,499.21.

The Russell 2000 Index of smaller companies fell 29.49, or 6.11 percent, to 452.80.

Declining issues overwhelmed advancers by more than 10 to 1 on the New York Stock Exchange, where volume came to 1.46 billion shares.

Macy’s shares fell $1.04, or 11 percent, to $8.37. Best Buy shares tumbled $1.91, or 8 percent, to $21.97.

The future of the country’s top automakers remained a major concern on Wall Street as well, as investors waited to see whether the government would put together a bailout plan for General Motors Corp., Ford Motor Co. and Chrysler.

General Motors was the only gainer among the 30 Dow stocks Wednesday, rising 16 cents, or 5.5 percent, to $3.08. Ford gained 4 cents, or 2.2 percent, to $1.84.

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