General Electric Co. and Caterpillar Inc. lost more than 9.7 percent following a report that manufacturing contracted at the fastest pace in 26 years. American Express Co. and JPMorgan Chase & Co. fell more than 15 percent on Oppenheimer & Co. analyst Meredith Whitney’s prediction that credit-card companies will cut available lending by 45 percent, or more than $2 trillion. Treasuries rose, pushing yields to record lows, as Federal Reserve Chairman Ben S. Bernanke said the central bank may buy bonds to combat the worsening recession.
The S&P 500 sank 8.9 percent to 816.19, with financial stocks in the index tumbling a record 17 percent as a group. The Dow Jones Industrial Average plunged 679.95 points, or 7.7 percent, to 8,149.09 with all 30 companies declining. The Nasdaq Composite Index declined 9 percent to 1,398.07. Almost 38 stocks retreated for each that rose on the New York Stock Exchange.
European stocks dropped, sending the Dow Jones Stoxx 600 Index to its first retreat in six days, as record declines in European and Chinese manufacturing signaled the global economic slump is worsening.
The Stoxx 600 declined 6 percent to 193.91, the steepest slide since Oct. 15. The index had its biggest advance since January 1987 last week as investors speculated stimulus packages and interest-rate cuts in Europe, the U.S. and China will help stabilize markets. Europe’s economy fell into its first recession in 15 years in the third quarter as the worst financial crisis since the Great Depression raised borrowing costs and eroded confidence.
National benchmark indexes decreased in all 18 western European markets. The FTSE 100 dropped 5.2 percent. Germany’s DAX lost 5.9 percent as ThyssenKrupp AG declined for the first time in seven days. France’s CAC 40 slipped 5.6 percent.
Japan stocks declined on concern bad- loan costs and job losses will mount after the failure of homebuilder Morimoto Co. drove bankruptcies by listed companies to a postwar record. The Nikkei 225 Stock Average slumped 115.05, or 1.4 percent, to close at 8,397.22 in Tokyo, retreating from the gauge's biggest weekly gain in a month.
Australian stocks fell as the deteriorating global economy weighed on corporate profit growth and commodity prices. The S&P/ASX 200 Index lost 1.6 percent to 3,681.20 at the close of trading in Sydney.
China's stocks rose, as a government plan to increase consumer spending overshadowed reports that manufacturing contracted by a record last month. The CSI 300 Index rose 34.28, or 1.9 percent, to 1,864.20 at the close.