Apple tumbled the most in more than five years on the Nasdaq Stock Market after saying iPod sales were little changed in the U.S. Motorola, the largest U.S. maker of mobile phones, posted its biggest drop since October 2002 after forecasting an unexpected loss. Exxon Mobil Corp. and Chevron Corp. led oil producers lower as crude prices slumped.
The Standard & Poor's 500 Index slid 29.46, or 2.3 percent, to 1,281.04 at 9:39 a.m. in New York. The Dow Jones Industrial Average declined 221.03, or 1.9 percent, to 11,750.16. The Nasdaq Composite Index tumbled 55.49, or 2.4 percent, to 2,236.78. Europe's benchmark index dropped after the European Central Bank damped speculation it would follow the Federal Reserve in lowering interest rates, while Asian shares rebounded from the worst two-day decline in 18 years.
Technology companies and energy producers, which helped lead the market's advance last year, have been among the biggest decliners in 2008 as the fallout from the collapse of the subprime mortgage market threatens to drag the economy into recession. The S&P 500 has lost 13 percent this year and is headed for its worst monthly decline since August 1998, when the benchmark tumbled 15 percent as Russia defaulted on domestic debt.
The S&P 500 retreated to a 16-month low yesterday after the Fed's biggest rate cut in 23 years failed to persuade investors that the U.S. will avoid a recession.