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October 22, 2008

Stock selloff accelerates

NEW YORK ( — Stocks tumbled Wednesday afternoon as weak corporate results and forecasts – and slumping commodity prices – amplified fears of a broad recession.

Global markets slid, with Asian and European stocks ending lower. Treasury prices rose, lowering the corresponding yields. The dollar was mixed versus other major currencies. Oil, gas and gold prices fell.

With roughly an hour left in the session, the Dow Jones industrial average (INDU) had lost 373 points, or 4.1%, after having lost as much as 430 points earlier.

The Standard & Poor’s 500 (SPX) index lost 4.9% and the Nasdaq composite (COMP) lost 3.7%.

Lending rates improved, helping to reassure investors that the efforts of world governments to stabilize financial markets are starting to work. But any relief about the improvement in the credit market was overshadowed by recession fears.

In economic news, the number of layoffs impacting 50 workers or more rose to the highest level in September since the month of the 9/11 terrorist attacks.

Stocks fell Tuesday as weak quarterly results and forecasts underscored the depth of what many think is a recession. Wednesday’s reports, including a big, surprise quarterly loss from bank Wachovia, added to those worries.

There is an increased focus on results this week because 140 of the S&P 500 companies are reporting, giving investors the best sense yet of the health of corporate America.

With 21% of S&P 500 companies already having reported results, third-quarter profits are currently on track to have fallen almost 10% from a year ago, according to the latest estimates from Thomson Reuters.

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