Stocks fell Wednesday morning as a fresh bout of weakness from major
retailers stoked fears that anemic consumer spending will push the
economy into recession.
The Dow Jones industrial average (INDU) was down 1.6% in early trading.
The Standard & Poor's 500 (SPX) index was also off 1.6% and the
Nasdaq composite (COMP) fell 1.4%.
Stocks fell Tuesday, for the second session in a row, as investors
largely overlooked a new government plan aimed at helping struggling
homeowners.
Best Buy, the nation's largest electronics retailer, cut its full-year
profit forecast, citing continued weakness in consumer spending ahead
of the all-important holiday shopping period.
The company now expects earnings for the year to be between $2.30 and
$2.90 a share on sales of between $43.7 billion and $45.5 billion. The
company previously had forecast full-year earnings of between $3.25 to
$3.40 a share.
Best Buy said same-store sales for the year could decline between 1%
to 8% compared to its previous estimate for an increase of 2% to 3%.
Adding to the retail sector's woe, department store operator Macy's
said it swung to a loss in the fiscal third quarter as wary shoppers
drove sales down 7%.
American Express: The credit card issuer is seeking an estimated $3.5
billion in aid from the federal government, according to The Wall
Street Journal.
The Federal Reserve, using emergency power, granted approval for American Express to become a bank holding company Monday.
Other markets: In global trading, Asian markets tumbled, with Japan's
Nikkei 225 down 1.3%. European markets declined as well, with Germany's
DAX falling 1.5%.
COMEX gold for December delivery fell $4.80 to $728 an ounce.
U.S. light crude oil for December delivery slipped $1.74 to
$57.59 a barrel on the New York Mercantile Exchange. The retreat comes
despite a report from the International Energy Agency predicting that
oil will reach $200 a barrel by 2030. The IEA also said world energy
demand will rise an average of 1.6% per year over the next few decades.