Stocks swooned Thursday, as weak reports on retail sales and jobless claims added to fears of a prolonged recession. The Dow is back below 9,000 on worries about the economy.
With the exception of discount chain Wal-Mart most retailers saw October sales in line with the bruised economy. Thomson Reuters estimates the monthly sales could be the worst in 8 years.
Gap reported a 16% drop in sales at stores open a year or more, a retail industry metric known as same-store sales. Macy's same-store sales fell 6.3% and the company warned November sales would weaken.
AnnTaylor Stores said same-store sales fell 19% from a year ago. The women's clothing retailer also said it was expanding its restructuring program and warned that third-quarter results won't meet forecasts. Shares fell 24%.
Signs of the recession were evident in economic reports released earlier this week. They included dour readings on manufacturing, factory orders and the services sector and the worst monthly auto sales in 25 years.
The number of Americans filing new claims for unemployment last week topped forecasts.
The weekly number followed a pair of monthly reports Wednesday that showed the labor market continued to get hammered in October.
The reports were especially worrisome ahead of Friday's big government report. That report is expected to show that employers cut 200,000 jobs from their payrolls in October. Meanwhile, the unemployment rate, which is generated by a separate survey, is expected to rise to 6.3% from 6.1% the previous month.
In global trade, Asian markets tumbled on recession fears. European markets were lower in afternoon trading, after European and British central banks announced interest rate cuts.
The dollar gained against the euro and the yen.
COMEX gold for December delivery rose $14.60 to $757 an ounce.
U.S. light crude oil for December delivery fell $3.70 to $61.60 a barrel on the New York Mercantile Exchange.
The credit market continued to improve. The 3-month Libor fell to 2.39% from 2.51% Wednesday, a nearly four-year low.
The yield on the 3-month Treasury bill, seen as the safest place to put money in the short term, fell to 0.36% from 0.39% Wednesday, with investors preferring to take a small return on their money than risk the stock market. Last month, the 3-month yield reached a 68-year low around 0% as investor panic peaked.
Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.72% from 3.70% Wednesday. Treasury prices and yields move in opposite directions.