Treasury prices slid, boosting the corresponding yields, as investors sought safety in government debt. The dollar was mixed versus other major currencies. Oil prices spiked 14%, while gold prices dipped.

The Dow Jones industrial average (INDU) slid 89 points, or 1.2% closing at the lowest point since Oct. 9, 2002, the low of the last bear market. The Dow had dropped as low as 7,447.55 during the session.

The Standard & Poor's 500 (SPX) index lost 9.5 points, or 1.2% and closed at its lowest point since Nov. 20. That sets the index just above the so-called bear market lows hit in the late fall when the panic around the financial sector crisis peaked.

The Nasdaq composite (COMP) shed 25 points or 1.7%. Tech has held up better than the rest of the market and the Nasdaq stands almost 10% above its Nov. 20 close.

Wall Street has struggled lately on worries that the U.S. government's various plans to soften the recession won't work in the face of an accelerating global slowdown.

"The government is doing everything and anything to right this ship, but the big liquidity players, the hedge funds and the mutual funds, are hoarding cash," said Gary Hager, president at Integrated Wealth Management.

The Dow has now broken through the so-called bear market lows of late November, reached as the panic around the financial sector crisis peaked.

Hager said the major gauges have done enough damage on the technical side in the last few days that they are at risk of falling a lot more over the next week.

"The market is on life support and there aren't enough people in the market to get under a selloff and turn it around," he said.

But that doesn't mean stocks have to slide aggressively from here.

"We didn't rocket into the lows, we kind of slouched," said Kim Caughey, senior equity analyst at Fort Pitt Capital Group. "It doesn't feel frantic like it did in November, where volatility is through the roof."

She said stocks are likely to continue drifting lower through the first half of the year, particularly as there is no big catalyst looming to change Wall Street's momentum.

Friday brings a key report on consumer prices and quarterly results from J.C. Penney (JCP, Fortune 500) and Lowe's (LOW, Fortune 500).

Economy: The Federal Reserve on Wednesday lowered its forecast for the first half of the year, noting that the economy will continue to shrink and unemployment will continue to rise. Thursday's reports demonstrated that forecast.

The number of Americans filing new claims for unemployment held steady last week at 627,000, versus forecasts for a drop to 620,000. But the number of Americans continuing to file claims rose to a record 4,987,000.

Wholesale inflation prices advanced more than expected last month, partly as a result of higher energy costs. The Producer Price Index (PPI) rose 0.8% after falling 1.9% in December. Economists thought it would rise 0.3%.

The so-called core PPI, which strips out volatile food and energy prices, rose 0.4% after rising 0.2% in December. Economists thought it would rise just 0.1%.

The Philadelphia Fed index, a regional reading on manufacturing, fell to minus 41.3 from minus 24.3 in January. Economists thought it would dip to minus 25. It was the lowest reading since 1990, according to High Frequency Economics.

On the upside, the index of leading economic indicators, issued by the Conference Board, rose 0.4% in January from a revised 0.2% in December. Economists thought it would rise 0.1%.

Washington: The government has introduced or modified a number of new plans over the last week as part of its attempt to stabilize the economy. But the market reaction has been muted at best.

On Wednesday, President Obama unveiled the housing plan that is meant to help up to 9 million borrowers who are struggling amid falling home prices and unaffordable mortgages. Analysts say the fix will help many, but not all.

On Tuesday, General Motors (GM, Fortune 500) and Chrysler asked the government for another $21.6 billion to stay afloat, but the final tally for the auto bailout could be a lot higher.

Investors are still sorting through the details of the $787 billion economic stimulus plan, which President Obama signed into law on Tuesday.

And Treasury's bank bailout plan, announced last week, left investors scratching their heads over the lack of details.

Company news: Hewlett-Packard (HPQ, Fortune 500) reported lower earnings that met analysts' estimates on higher revenue that missed estimates in a report released late Wednesday. The tech leader also gave a forecast for current-quarter results that is short of forecasts. HP shares fell nearly 8% Thursday.

Sprint Nextel (S, Fortune 500) reported a quarterly loss and said 1.3 million subscribers ditched its mobile phone service. But the loss narrowed from a year earlier and was smaller than analysts had expected. Revenue fell from the prior year and was shy of expectations. Investors focused on the positive and the stock rose 20%.

Big financial stocks tumbled, including Dow components American Express (AXP, Fortune 500), Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500) and JPMorgan Chase (JPM, Fortune 500). Other losers included Wells Fargo (WFC, Fortune 500), Fifth Third (FITB, Fortune 500) and Capital One Financial (CAF).

The KBW Bank (BKX) index lost 7%.

Truckers, railroads and airline stocks tumbled as well, sending the Dow Jones Transportation (DJT) average to its lowest close in about 5-1/2 years.

Market breadth was negative. On the New York Stock Exchange, losers topped winners seven to three on volume of 1.49 billion shares. On the Nasdaq, decliners beat advancers two to one on volume of 2.06 billion shares.

Bonds: Treasury prices slipped, raising the yield on the benchmark 10-year note to 2.81% from 2.75% Wednesday. Treasury prices and yields move in opposite directions.

Lending rates were little changed. The 3-month Libor rate was 1.25%, unchanged from Wednesday, according to Bloomberg.com. The overnight Libor rate fell to 0.29% from 0.30% Wednesday. Libor is a bank lending rate.

Other markets: In global trading, most Asian and European markets ended higher.

The dollar fell against the euro and gained against the yen.

U.S. light crude oil for March delivery settled up $4.86 to $39.48 a barrel on the New York Mercantile Exchange. Prices spiked after the government said crude supplies fell last week for the first time in two months.

COMEX gold for April delivery fell $1.70 to settle at $976.50 an ounce.

Gasoline prices decreased eight-tenths of a cent to a national average of $1.949 a gallon, according to a survey of credit-card swipes released Thursday by motorist group AAA.  

At 7:40 a.m. ET, the Dow Jones industrial average, S&P 500 and Nasdaq futures were higher with a comparison to fair value.

Futures measure current index values against the perceived future performance, and are used as a gauge for market activity.

On Wednesday, stocks finished little changed in the wake of the Federal Reserve's downward revision of its economic forecast and President Obama's $75 billion housing bailout proposal.

Asian stocks closed higher, with Japan's Nikkei index up 0.3%. The European markets were mixed in midday trading.

Economy: At 8:30 a.m. ET, the government will unveil its weekly figure for initial jobless claims, which are expected to total 615,000 in the week ended Feb. 14, according to a consensus of economists surveyed by Briefing.com. That would be fewer than the prior week's 623,000 claims.

Ken Wattret, economist with BNP Paribas in London, said Wall Street will be most focused on the jobless claims report out of all the indicators to be released this morning.

"The obvious focal point is initial [jobless] claims, the reason being that the numbers have been so awful, that it really demonstrates how bad a shape the labor market has been in," said Wattret.

But he added that the labor market has been so dismal that the jobless claims number would be have to be significantly worse than expected for it to have any negative impact on stocks.

"We're looking at horrendous adjustments in the labor market, but to a large extent that's already been priced in," said Wattret, who has a particularly dismal forecast of 640,000 claims.

At the same time, the government will release its monthly figures for the Producer Price Index, a measure of wholesale inflation. The PPI is expected to rise 0.3% for January, according to a consensus of economists surveyed by Briefing.com, compared to a decline of 1.9% the prior month.

The core PPI, which excludes the volatile energy and food costs, is expected to edge up 0.1% in January, according to the Briefing.com consensus, following a gain of 0.2% the prior month.

Also, the Energy Information Administration will release its weekly report on U.S. crude inventories at 11 a.m. ET. Analysts polled by research firm Platts forecast a rise of 3.5 million barrels for oil and a drop of 1 million barrels for gasoline.

Reports on leading economic indicators and manufacturing in the Philadelphia area will be released during the trading day.

Companies: Computer products maker Hewlett-Packard (HPQ, Fortune 500), a Dow component, cut its outlook for its full fiscal year after revenue in the quarter ended Jan. 31 missed expectations. HP's per-share earnings for the quarter matched forecasts. HP shares fell nearly 4% in premarket trading.

Sprint Nextel (S, Fortune 500) reported its fourth-quarter results, with a better-than-expected net loss of 1 cent per share. The telecom was expected to report a loss of 3 cents per share, according to a consensus of analyst forecasts compiled by Thomson Reuters. Shares rose nearly 2% in premarket trading.

CVS (CVS, Fortune 500) reported adjusted earnings of 70 cents per share, which was better than the expected 69 cents per share Thomson Reuters consensus.

Oil and money: Oil rose $1.04 to $35.66 a barrel in electronic trading. The dollar was mixed against major international currencies, rising against the yen, but falling versus the euro and the British pound. 

The Dow Jones industrial average (INDU) added 3 points, or less than 0.1%. During the session, the Dow had fallen to the lowest point since Nov. 21, considered by some to be the low of the bear market.

The Standard & Poor's 500 (SPX) index lost 1 point or 0.1%. During the session, the S&P 500 also fell to its lowest point since Nov. 21.

The Nasdaq composite (COMP) lost less than 3 points or 0.2%.

The Federal Reserve revised lower its economic outlook for the first half of the year, saying it expects the economy to shrink and unemployment to rise. The report, released in the afternoon, was part of the minutes from the last Fed policy meeting in which the bankers held interest rates steady at historic lows.

Stocks have tumbled over the past week on fears that the U.S. government's plans to soften the recession won't work in the face of an accelerating global slowdown.

"We keep punting the problem a couple of months down the road and hope that the economy turns around," said Scott Armiger, portfolio manager at Christiana Bank & Trust company. "Overall, we're not fixing the problem."

On Wednesday, Obama unveiled a multi-billion dollar plan that is meant to help up to 9 million borrowers who are struggling amid falling home prices and unaffordable mortgage payments. (For details, click here)

Yet, investors remain worried about the prospects of an economic recovery and the timeline for any turnaround.

The Obama administration released some initial information last week about the multi-billion dollar bank bailout plan. But details were scarce and financial stocks have suffered since then. On Tuesday, President Obama signed into law the $787 billion economic stimulus plan. But there are concerns that the plan is too heavy on spending, Armiger said.

After the market close, Hewlett-Packard (HPQ, Fortune 500) reported lower fiscal first-quarter earnings that met analysts' estimates on higher revenue that missed estimates. The tech leader also gave a forecast for current-quarter results that is short of expectations. HP shares fell 4% in extended-hours trading.

Thursday brings quarterly earnings from General Motors, the weekly jobless claims report and a reading on wholesale inflation, all before the start of trading.

The index of leading economic indicators is due after the start of trading, as is the Philadelphia Fed index - a regional manufacturing survey.

Economy: A report released earlier Wednesday showed January housing starts plummeted 17% from December to an all-time low. Building permits, a sign of builder confidence, fell 4.8% from December to an all-time low. (Full story)

Another report showed production at the nation's factories and mines slumped 1.8% in January, worse than expected.

Fed Chairman Ben Bernanke said Wednesday that the central bank will improve how it discloses information because of greater interest in its ballooning balance sheet. Bernanke spoke at the National Press Club in Washington, D.C.

Autos: As had been expected, the auto makers went back to the table late Tuesday to ask for more government money to stay afloat.

After the market close Tuesday, Chrysler and GM (GM, Fortune 500) unveiled their plans for becoming viable after receiving $17.4 billion in government aid late last year.

Chrysler said it will need at least $5 billion more to turn the company around. GM said it needs an additional $9.1 billion and could require another $7.5 billion in the next two years if conditions deteriorate. The companies also said they would cut 50,000 jobs worldwide by the end of the year. (Full story)

Company news: Goodyear Tire & Rubber (GT, Fortune 500) said it will cut 5,000 jobs this year, as slowing auto sales have eaten into demand for its products.

Comcast (CMCSA, Fortune 500) reported a weaker quarterly profit and said it lost 233,000 subscribers in the fourth quarter of 2008. However, excluding charges, the cable provider's profit was better than what analysts were expecting. Shares fell 4% in active Nasdaq trading.

General Electric (GE, Fortune 500) CEO Jeffrey Immelt said he gave up a 2008 bonus and other compensation in the aftermath of GE's weaker earnings and sliding stock price last year.

Market breadth was negative. On the New York Stock Exchange, decliners beat advancers by 7 to 3 on volume of 1.43 billion shares. On the Nasdaq, losers topped winners by 8 to 5 on volume of 2.09 billion shares.

Bonds: Treasury prices slipped, raising the yield on the benchmark 10-year note to 2.75% from 2.65% Monday. Treasury prices and yields move in opposite directions.

Lending rates were little changed. The 3-month Libor rate was 1.25%, unchanged from Tuesday, according to Bloomberg.com. The overnight Libor rate fell to 0.3% from 0.31% Tuesday. Libor is a bank lending rate.

Other markets: In global trading, Asian markets were mixed and most European markets ended lower.

The dollar gained against the euro and the yen.

U.S. light crude oil for March delivery fell 31 cents to settle at $34.62 a barrel on the New York Mercantile Exchange.

COMEX gold for April delivery rose $10.70 to settle at $978.20 an ounce.

Gasoline prices decreased three-tenths of a cent to a national average of $1.957 a gallon, according to a survey of credit-card swipes released Wednesday by motorist group AAA.  

The Dow Jones industrial average (INDU) fell nearly 298 points, or 3.8%, ending just above the bear market closing low of Nov. 20, 2008.

The Standard & Poor's 500 (SPX) index lost almost 38 points, or about 4.6% and also touched its lowest point since Nov. 21st. The Nasdaq composite (COMP) lost 63 points, or about 4.1%. The Nasdaq has performed better than the rest of the market and has held above its bear-market lows.

Wall Street retreated last week and resumed the selloff Tuesday. All financial markets were closed Monday for Presidents Day.

"There a continuing concern about the economy, what steps are being taken to right it and how effective those steps are going to be," said Timothy Ghriskey, chief investment officer at Solaris Asset Management.

He said that concerns about the banking sector remained, in the aftermath of last week's badly received bank bailout plan. Additionally, investors were concerned about the automakers as Chrysler and GM (GM, Fortune 500) unveiled their plans for becoming viable after receiving $17.4 billion in government aid. After the close, Chrysler said it will need at least $5 billion more to turn the company around, and that it will cut 3,000 jobs. (Full story)

On Wednesday, the president is expected to detail a plan to modify home loans - a move seen as critical to stemming foreclosures and stemming the pace of the housing slowdown.

The plan has the potential to stabilize the market, Ghriskey said, but if it's not presented in a sophisticated way, it could send stocks even lower.

Reports on January housing starts and building permits are due before the start of trading Wednesday. Both are expected to show continued weakness.

Federal Reserve Chairman Ben Bernanke speaks Wednesday afternoon at the National Press Club in Washington, D.C. about the Fed's lending programs and balance sheet. Separately, the minutes from the last Fed policy meeting are due to be released in the afternoon

Washington: President Obama signed into law the $787 billion stimulus bill Tuesday afternoon. Both chambers of Congress approved the bill last week, largely along party lines. The package includes at least $290 billion in tax provisions, as well as billions in aid and spending.

But the signing of the bill was no surprise to investors and failed to move markets out of the recent morass.

"I think people are pretty skeptical of Congress," said John Wilson, chief technical strategist at Morgan Keegan.

"There's a real worry that the stimulus plan doesn't attack the right problems," Wilson said. "And you're seeing a follow through on the lack of details out of Geithner."

The financial sector suffered a big setback last week after Treasury Secretary Tim Geithner's bank bailout plan failed to provide the requisite detail that would have reassured investors. Bank stocks continued to plunge Tuesday, with the KBW Bank (BKX) index losing 10%.

Stock movers: Wal-Mart Stores (WMT, Fortune 500) reported lower quarterly earnings that, excluding charges, topped analysts' estimates. However, the world's largest retailer forecast first-quarter earnings that are short of forecasts. Shares gained 3.7%. Wal-Mart was the Dow's only gainer.

Dow stock GM was the biggest decliner, losing 12.8%. The financial components were also hit hard.

American Express (AXP, Fortune 500) lost 11.3%, Bank of America (BAC, Fortune 500) lost 12%, Citigroup (C, Fortune 500) lost 12.3% and JPMorgan Chase (JPM, Fortune 500) lost 12.3%.

A slide in oil prices dragged on energy stocks. Dow components Chevron (CVX, Fortune 500) and Exxon Mobil (XOM, Fortune 500) both lost more than 4%.

Trump Entertainment Resorts (TRMP) filed for Chapter 11 bankruptcy protection Tuesday, as the recession and weaker gambling revenue took a toll. Shares fell nearly 22%.

Market breadth was negative. On the New York Stock Exchange, decliners beat advancers by more than 14 to 1 on volume of 1.6 billion shares. On the Nasdaq, losers topped winners by almost 6 to 1 on volume of 2.4 billion shares.

Economy: The day's one economic report of note was much weaker than expected. The N.Y. Empire State index, a regional manufacturing report, fell to negative 34.65 in February from negative 22.2 in the prior month. Economists surveyed by Briefing.com expected a smaller decline.

Bonds: Treasury prices rallied, lowering the yield on the benchmark 10-year note to 2.65% from 2.89% Friday. Bond markets were closed Monday. Treasury prices and yields move in opposite directions.

Lending rates inched higher. The 3-month Libor rate was 1.25% Tuesday, up from 1.24% Friday, according to Bloomberg.com. The overnight Libor rate rose to 0.31% from 0.30%. Libor is a bank lending rate.

Other markets: In global trading, Asian and European markets tumbled.

The dollar gained against the euro and fell against the yen.

U.S. light crude oil for March delivery fell $2.58 to settle at $34.93 a barrel on the New York Mercantile Exchange.

COMEX gold for April delivery rose $25.30 to settle at $967.50 an ounce.

Gasoline prices decreased half a cent to a national average of $1.96 a gallon, according to a survey of credit-card swipes released Tuesday by motorist group AAA.  

 

At 5:25 a.m. ET, the Dow Jones industrial average, S&P 500 and Nasdaq futures were lower with a comparison to fair value, suggesting a dismal start on Wall Street.

Futures act as a general guide of how markets will likely open, measuring current index values against the perceived future performance.

U.S. markets were closed Monday in observance of President's Day.

Global markets on Tuesday were lower, with declines in the Asian and European indexes.

All eyes will be on President Obama, who is expected to sign the $787 billion stimulus bill into law sometime Tuesday, marking the final step for approval in what has been a contentious process and the first major challenge for the new president.

Enthusiasm over the stimulus plan and bank bailout have been tempered by an ongoing barrage of bad corporate and economic news. Last week, the Dow shed 5.2%, the S&P 500 fell 4.8% and the Nasdaq stumbled 3.6%.

Looking forward, the president on Wednesday is expected to unveil his long-awaited foreclosure prevention plan.

Companies: Wal-Mart Stores (WMT, Fortune 500) will report fourth-quarter earnings before the bell. Analysts expect the company to report a 2% gain in revenues to $109 billion, and a 5% decline in earnings to 99 cents per share, according to a consensus of analysts polled by Thomson Reuters.

Tuesday is also deadline day for General Motors (GM, Fortune 500) and Chrysler. The automakers, who have already received approval for $17.4 billion in loans from the government, will submit their latest financial survival plans to the Treasury Department.

Oil and money: Oil prices fell 56 cents a barrel in early trading to $36.45. The U.S. dollar rose against major currencies, including the euro, the yen and the British pound