NEW YORK — Wall Street plunged for a second day, triggered by computer-gear maker Cisco Systems warning of slumping demand and retailers reporting weak sales for October.
Concerns about widespread economic weakness sent the major stock indexes down more than 4 percent Thursday, including the Dow Jones industrial average, which tumbled more than 440 points.
The two-day plunge totals about 10 percent for the major indexes. Paper losses during that time in U.S. stocks came to $1.2 trillion, according to the Dow Jones Wilshire 5000 Composite Index, which represents nearly all stocks traded in America.
Comments from Cisco that it saw a steep drop in orders in October and reports from retailers that consumers are skipping trips to the mall provided fresh evidence of the economy’s struggles. While sales at Wal-Mart Stores Inc. benefited from bargain-seekers, some specialty retailers posted huge drops in monthly sales.
Adding to investors’ list of worries, the Labor Department said the number of people continuing to draw unemployment benefits jumped to a 25-year high, increasing by 122,000 to 3.84 million in late October. It marked the highest level since late February 1983, when the economy was being buffeted by a protracted recession.
While new claims for unemployment benefits dipped by 4,000 to a seasonally adjusted level of 481,000 last week, the levels remain elevated. The findings added to the market’s unease ahead of today’s October employment report, a widely watched barometer of the economy’s health.
“I think everybody kind of simultaneously — the consumers and businesses — is tightening belts, so that’s triggering a reasonably precipitous slowdown that’s widespread,” said Ed Hyland, global investment specialist at J.P. Morgan’s Private Bank. “This is something that we haven’t really seen, this level of this rapid and significant pullback both in the market and the economy.”
Thursday’s rout followed a drop of more than 5 percent in the market Wednesday that saw the Dow plunge nearly 500 points.
The Dow fell 443.48, or 4.85 percent, to 8,695.79 after falling as much as 502 in the final five minutes of trading. The blue chips remain above 8,451.19, their Oct. 10 closing low from the market’s yearlong decline.
Broader stock indicators also posted sharp losses. The Standard & Poor’s 500 index fell 47.89, or 5.03 percent, to 904.88, and the Nasdaq composite index fell 72.94, or 4.34 percent, to 1,608.70.
