Wall Street tumbled Friday after the previous session's huge rally and as investors digested slumping consumer spending.
U.S. stocks briefly pared early losses after the Reuters/ University of Michigan index of consumer sentiment unexpectedly rose to 57.9 in November, better than estimates. However, major indexes lost ground again as investors concerned about pullback of consumer spending.
The U.S. Commerce Department reported that retail sales plunged by the largest amount on record in October, falling 2.8 percent as the financial crisis weighed on consumer spending. Meanwhile, retailers Abercrombie & Fitch and J.C. Penney both warned that profits will go below Wall Street's estimates.
Moreover, downbeat news from the tech sector weighed on technology-heavy Nasdaq. Sun Microsystems planed to cut up to 6, 000 workers, or about 18 percent of its global staff. And handset maker Nokia warned that sales next year will reel from the global economic slowdown.
Federal Reserve Chairman Ben Bernanke said the markets remain under "severe strain" during a speech in Frankfurt, Germany. He indicated that central bankers stand steady to take additional actions, signaling the Fed is open to a fresh interest rate cut.
The Dow Jones average fell 337.93, or 3.82 percent, to 8,497.31. The Standard & Poor's 500 index fell 38.00, or 4.17 percent, to 873.29, and the Nasdaq stumbled 79.85, or 5.00 percent, to 1,516. 85.
(Xinhua News Agency November 15, 2008)
