U.S. Stocks Drop, Dow Average Posts Worst 2-Day Loss Since ‘87

Lynn Thomasson
Bloomberg News
Thursday, November 6, 2008

Nov. 6 (Bloomberg) — U.S. stocks slid and the Dow Jones Industrial Average posted its worst two-day loss since 1987 after jobless claims jumped and the shrinking economy decimated earnings at companies from Blackstone Group Inc. to News Corp.

Exxon Mobil Corp. dropped 4.3 percent, leading energy companies to the biggest declines in the Standard & Poor’s 500 Index, as oil slid to a 19-month low below $61 a barrel. News Corp. sank 16 percent after the media company controlled by Rupert Murdoch said ad sales decreased. Blackstone, the world’s largest private-equity firm, lost 9.5 percent after posting the biggest quarterly loss in its 18 months as a public company.

“We’re a long way from the end of the economic challenges,” said Mike Morcos, who helps manage $1 billion at Old Second Wealth Management in Aurora, Illinois. “Earnings next year are going to be significantly lower and estimates are going to continue to come down.”

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The Standard & Poor’s 500 Index fell 5.1 percent to 903.89 at 3:38 p.m. in New York. The Dow Jones Industrial Average retreated 457.82 points, or 5 percent, to 8,681.45, extending its two-day loss to almost 10 percent. The Russell 2000 Index of small U.S. companies declined 3 percent to 499.03. The MSCI World Index of 23 developed markets lost 6.2 percent to 922.25.

The two-day tumble wiped out more than half of the S&P 500’s rebound from a five-year low on Oct. 27. An industry report showing an unexpected decline in sales at chain stores in October also weighed on stocks as 23 of 27 companies in the S&P 500 Retailing Index slumped.  

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