From combined dispatches
Wall Street finished sharply lower Monday as investors pored over more signs of economic weakness, including a huge round of layoffs in the financial sector and news that Japan‘s economy had unexpectedly slid into recession.
Government data Monday showed that Japan’s economy contracted at an annual pace of 0.4 percent in the July-September period after falling an annualized 3.7 percent in the second quarter. That means Japan, along with the 15-nation euro zone, is now technically in a recession, commonly defined as two straight quarters of contraction.
In a signal that banks are still struggling in the wake of massive losses tied to bad mortgage debt, Citigroup Inc. announced it is cutting at least another 52,000 jobs.
Meanwhile, a better-than-expected reading on industrial production did little to boost investor sentiment. The Federal Reserve said Monday that industrial output rose 1.3 percent last month, after plunging in September by the largest amount in more than 60 years.
Still, the gain wasn’t good enough, said Anthony Conroy, managing director and head trader for BNY ConvergEx Group, adding that investors want a more concrete sign that the economy could be improving.
“I think we’re seeing a tremendous amount of bad economic data,” he said.
The Dow fell 223.73, or 2.63 percent, to 8,273.58, near its lows of the session.
Standard & Poor’s 500 Index fell 22.54, or 2.58 percent, to 850.75, while the Nasdaq Composite Index dropped 34.80, or 2.29 percent, to 1,482.05.
Declining issues outpaced advancers by a 2 to 1 margin on the New York Stock Exchange, where consolidated volume came to a light 5.7 billion shares.
In Asian trading, Japan’s Nikkei Index rose 0.71 percent despite a report showing the second-straight quarterly decline in gross domestic product - signaling a recession.
The weaker-than-expected third quarter results stemmed mainly from a sharp pullback in corporate investment amid the unfolding global financial crisis and sputtering global demand. Economists surveyed by Kyodo News agency had predicted an annualized 0.1 percent rise in the third quarter.
In European trading, Britain’s FTSE 100 fell 2.38 percent, Germany’s DAX Index fell 3.25 percent, and France’s CAC-40 fell 3.32 percent.