* Pessimism on economy fuels risk aversion
* Financials, energy, retailers among top drags
* Indexes off 5 pct to 6 pct in broad sell-off
* For up-to-the-minute market news, please click on
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(Updates to midday)
By Ellis Mnyandu
NEW YORK, Dec 1 (Reuters) - U.S. stocks slid on Monday as
news pointing to the deepening economic slump around the world
punctured last week's market enthusiasm, with financial
services companies and retailers among Wall Street's biggest
casualties.
Major industrial companies also contributed to losses on
signs global demand is faltering, leading investors to pare
back risk in favor of safe-haven government debt.
The National Bureau of Economic Research, the arbiter of
U.S. business cycles, declared that the United States entered
recession in December 2007, ending 73 months of economic
expansion. For details, see []
"Things are looking quite bleak. Everyone acknowledges
that," said Brian Gendreau, investment strategist at ING
Investment Management in New York. "The question is to what
extent is that already priced into the markets. Apparently,
not entirely."
The Dow Jones industrial average <> slid 447.06
points, or 5.06 percent, to 8,381.98. The Standard & Poor's
500 Index <.SPX> tumbled 53.81 points, or 6.00 percent, to
842.43. The Nasdaq Composite Index <> dropped 94.80
points, or 6.17 percent, to 1,440.77, near its session low.
With the holiday shopping season under way, investors fear
that retailers may turn in their bleakest sales in perhaps two
decades. The S&P retail index <.RLX> declined 7.1 percent, as
shares of department store operator Macy's Inc <M.N> tumbled
11.7 percent to $6.55.
Shares of Wal-Mart Stores <WMT.N>, the world's biggest
retailer and a Dow component, shed 4.1 percent to $53.62.
Consumers made repeat trips to stores and spent more on
bargains this weekend, but analysts said the rush is unlikely
to translate into a much-needed boost in profit. For details,
see [].
On Nasdaq, wireless chip maker Qualcomm Inc <QCOM.O> was
the heaviest weight, falling 8.1 percent to $30.85.
Factory activity in the United States fell in November to
its weakest since 1982, according to the Institute for Supply
Management. For details, see [] The data jolted
investors, who got news of weaker Chinese and European
manufacturing activity earlier in the day.
Among financials, shares of Citigroup <C.N> sank 16.5
percent to $6.92 on the NYSE after an influential analyst
forecast more losses for the major U.S. bank.
A slide in commodity prices pushed resource stocks into
the red, with aluminum producer Alcoa <AA.N>, a Dow component,
tumbling 10.2 percent to $9.66.
Shares of Bank of America <BAC.N> slid 13.2 percent to
$14.10. The S&P financial index <.GSPF> plummeted 10.2
percent.
Among big manufacturers, Caterpillar Inc <CAT.N> plunged
6.7 percent to $38.26 and General Electric <GE.N> slid 7.4percent to $15.90. The market's slide extended a global equity
rout that hurt stocks in Asia and drove European indexes down
5 percent or more.
Investors also await Federal Reserve Chairman Ben
Bernanke's comments on the economy when the central bank chief
delivers a speech on Fed policy in Texas at 1:45 p.m. (1845
GMT)
A lower close on Monday would snap a five-day streak of
gains for the S&P 500.
The yield on the benchmark 10-year U.S. Treasury note
<US10YT=RR> sagged to a five-decade low and its price rose as
investors sought the safety of government debt.
Shares of energy companies succumbed to gravity as oil
prices fell on concerns that the economic slump will hurt
energy demand. U.S. front-month crude <CLc1> fell $4.63, or
8.5 percent, to $49.80 a barrel.
Major oil producer Exxon Mobil <XOM.N> lost 4.4 percent to
$76.64, while rival Chevron <CVX.N> slid 6.2 percent to
$74.16.
(Editing by Jan Paschal)
