The tech-heavy Nasdaq lost 150.68 points (8.47 percent) to 1,628.33 in another brutal session for stocks, despite massive rescue efforts for the ailing global banking sector. "The stock market is buried by recession fears," said Al Goldman at Wachovia Securities. Markets convulsed around the globe as the London FTSE 100 index of leading shares shed 7.16 percent while in Paris the CAC 40 fell 6.82 percent and the Frankfurt DAX gave up 6.49 percent.
Market action came on news that US retail sales slumped 1.2 percent in September, a sign of deeper troubles for an economy ailing from a financial market firestorm and tight credit. The drop in sales was the steepest since August 2005 and weaker than market expectations for a 0.7 percent decline.
"The retail sales data highlighted the market's most pressing concern now, which is the direction of the economy," said Gregory Drahuschak at Janney Montgomery Scott. "The credit market situation remains in flux, but traders in many cases are looking beyond this and wondering how long a slowdown will last and how deep it will be."
Carl Weinberg, chief economist at High Frequency Economics, said that even if credit flows are restored, the troubles are not over. "The world economy is still headed into a recession despite the global financial market rescue effort," Weinberg said. "The decline will be deep and protracted. It has already started. Nowhere is the economic house in greater disorder than Euroland, although some may argue that Japan is a bigger mess."