NEW YORK — A disheartened Wall Street fell for the third straight session Wednesday as investors absorbed another series of dismal corporate reports and news that the government won’t buy banks’ soured mortgage assets after all. The Dow Jones industrials dropped more than 410 points, and all the major indexes lost more than 4 percent.
The stock market has lost about $1 trillion over the past three days, according to the Dow Jones Wilshire 5000 index, which reflects the value of nearly all U.S. stocks.
The market started the day falling on more signs that companies are being hurt by a severe pullback in consumer spending. Macy’s said it lost $44 million in the third quarter as sales at the department- store retailer fell more than 7 percent. And consumer-electronics retailer Best Buy slashed its fiscal 2009 guidance on fears that consumer spending will erode even further.
Meanwhile, Morgan Stanley, suffering from the ongoing losses on Wall Street, outlined plans to cut 10 percent of staff in its institutional securities group — its biggest business, covering investment banking and stock trading.
The bleak reports, which followed disappointing news from coffee retailer Starbucks and homebuilder Toll Brothers earlier in the week, made it increasingly clear to investors that companies across the economy are suffering from the aftermath of the housing and credit crises.
“There just doesn’t appear to be an end in sight to the bad news,” said Anton Schutz, portfolio manager of the Burnham Financial Industries Fund and the Burnham Financial Services Fund. “The selling is relentless.”
Analysts say the market is in the process of retesting the intra day low hit Oct. 10, when the blue chips fell to 7,882.50.
The Dow shed 411.30, or 4.73 percent, to 8,282.66. It was the lowest close for the Dow since its 5 1/2-year closing low of 8,175.77 reached Oct. 27.
According to the Dow Jones Wilshire 5000 index, Wednesday’s paper losses amounted to about $600 billion. By that measure, the stock market has shed $9.1 trillion since the index’s Oct. 9, 2007, peak.
The broader Standard & Poor’s 500 index dropped 46.65, or 5.19 percent, to 852.30, and the Nasdaq composite index stumbled 81.69, or 5.17 percent, to 1,499.21.
Crude dropped below $57 a barrel Wednesday, down more than 60 percent in four months despite two recent OPEC production cuts. Light, sweet crude fell $3.50, or nearly 6 percent, to settle at $56.16 a barrel on the New York Mercantile Exchange.
