Stocks tumble, lose 10 percent in two-day rout

A sharp rise in jobless claims and the shrinking economy took heavy tolls as the Dow retreated more than 443 points.

By LYNN THOMASSON, Bloomberg News

Last update: November 7, 2008 - 12:16 AM

U.S. stocks slid, sending the market to its biggest two-day slump since 1987, after jobless claims jumped and the shrinking economy crushed earnings at companies from Blackstone Group Inc. to News Corp.

Blackstone, the largest private-equity firm, fell 12 percent after posting the biggest quarterly loss in its 18 months as a public company. News Corp. sank 16 percent after the media company controlled by Rupert Murdoch said ad sales decreased. Chevron Corp. fell 6.4 percent as oil tumbled to a 19-month low.

"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, Ill. "Earnings next year are going to be significantly lower and estimates are going to continue to come down.''

The Standard & Poor's 500 Index fell 5 percent to 904.88, extending its two-day loss to 10 percent. The Dow Jones industrial average retreated 443.48 points, or 4.9 percent, to 8,695.79. The Nasdaq composite index fell 72.94 points, or 4.34 percent, to 1,608.70.

The two-day tumble following Election Day wiped out more than half of the market's rebound from a five-year low on Oct. 27. Both the S&P 500 and Dow average posted their biggest two-day slides since plunging more than 24 percent as rising borrowing costs helped spur the market crash of October 1987.

The S&P 500 is down 38 percent this year, poised for the steepest retreat since 1937.

About 481,000 workers filed initial jobless claims last week, the Labor Department said Thursday. The number of people staying on benefit rolls was the most since February 1983.

A report today will probably show U.S. employers eliminated jobs in October for a 10th consecutive month, based on economists' estimates.

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