Stocks tumbled Tuesday morning as recession fears remained front and center, and investors continued to dump shares of automakers and financial services firms amid worries about their solvency.
Corporate news remained in focus Tuesday, with government offices and Treasury markets closed for Veterans Day.
Late Monday, the Federal Reserve gave the OK for the company and its American Express Travel unit to become bank holding companies. The move will give the company access to low-cost financing from the Fed, helping to stabilize amid the global credit crunch.
General Motors and Ford continued to plunge on worries about the companies ability to stay afloat without government intervention. Both companies, along with Chrysler, are seeking help from the U.S. government. On Friday, GM posted a steep loss and said it is running out of cash.
President-elect Barack Obama told President Bush Monday that the automakers need more federal help, according to his aides.
Late Monday, Starbucks reported weaker earnings and higher revenue, both of which missed estimates. Shares declined about 3% Tuesday morning.
COMEX gold for December delivery rallied $11.50 to settle at $735 an ounce.
U.S. light crude oil for December delivery fell $2.93 to $59.48 a barrel on the New York Mercantile Exchange.
The credit market continued to improve, with lending rates continuing to retreat from accelerated levels.The 3-month Libor fell to 2.18% from 2.24% Monday, a four-year low.
The U.S. Treasury market was closed for Veterans Day.