Consumer Spending Woes Sink Dow 176 Points

Wall Street has fallen again on a wave of worrisome news that revealed few industries are safe from the consumer spending slump. The Dow Jones closed down 176 points, or nearly 2 percent, at the 8,693 level, while broader stock indexes fell more than 2 percent.

The market managed to lift off its lows after a media report that quoted a BlackRock executive as saying a $30 billion Bear Stearns mortgage portfolio could be worth more than its market value suggests. Also, the government and the mortgage industry announced new actions to help homeowners renegotiate delinquent loans.

Homebuilder Toll Brothers Inc. and coffee chain Starbucks Corp. helped send Wall Street lower Tuesday after giving investors more evidence that the housing market and consumer spending are getting weaker. Toll Brothers said it couldn't project a profit for 2009, and Starbucks reported disappointing earnings.

In the first few minutes of trading, the Dow Jones industrial average was down 173 points, or nearly 2 percent, at the 8,697 level. The broader market indexes were also down more than 1 percent. Toll Brothers said fourth-quarter revenue fell 41 percent from the year-ago period.
The government and bond markets were closed for Veterans Day, so no economic reports are scheduled. Investors were focusing on corporate earnings reports instead.

Meanwhile, Starbucks said its profit dropped 97 percent in its fourth quarter mainly because of the costs of closing underperforming stores and also falling sales in the U.S.

Asia Stocks Retreat, Europe Lower

Stock markets in Asia declined and European markets opened lower Tuesday as the luster wore off China's $586 billion bailout of its own economy. Weakness on Wall Street also played a role.
Concerns about the global economy sapped enthusiasm over China's nearly $600 billion package to boost growth.

Tokyo's Nikkei 225 index was down 3 percent as the yen strengthened against the dollar. In Hong Kong, the Hang Seng benchmark was 2.2 percent lower.

Australia's benchmark fell 3.6 percent. Markets in Singapore, South Korea and India also declined.

The Shanghai Composite index, up earlier in the session, fell 1.5 percent despite figures showing the country's inflation rate eased further last month.

Oil prices fell to near an 18-month low around $60 a barrel Tuesday in Asia. One analyst said oil could fall even more.

China Appears To Go It Alone

China appears to be taking a "go it alone" attitude when it comes to the global fiscal crisis. Government officials indicated Tuesday that they prefer to focus on their country's economic stability and won't give in to pressure to contribute to a global bailout fund.

That word comes days ahead of next weekend's global summit in Washington to discuss how to respond to the crisis. British Prime Minister Gordon Brown has called on China and oil-rich nations in the Middle East to pump trillions of dollars into an International Monetary Fund bailout package.

Over the weekend, China announced its stimulus package, which focuses on the country's infrastructure, aid to the poor and farmers, and tax cuts for exporters.

LISA

AP, Dow Jones & Co., WSJ