NEW YORK — Wall Street finished sharply lower Monday as investors pored over more signs of economic weakness, including a huge round of layoffs in the financial sector.
After a turbulent week that sent the Dow Jones industrials down nearly 340 points, investors found little solace in the latest news. Stocks zigzagged throughout the session, finally giving way to a stream of late-day selling that left the Dow lower by 223 points.
In a signal that banks are still struggling in the wake of massive losses tied to bad mortgage debt, Citigroup is cutting another 53,000 jobs in the coming quarters. The company said that in addition to job cuts, it plans to lower expenses by about 20 percent and has reduced its assets by more than 20 percent since the first quarter of the year.
Investors were also nervously waiting to see if the nation’s troubled automakers would get a bailout. Senate Democrats, who were to introduce legislation Monday, want to use part of the $700 billion Wall Street bailout to help prop up Detroit’s Big Three carmakers: General Motors, Ford and Chrysler. A vote was expected as early as Wednesday.
Meanwhile, a better-than- expected reading on industrial production did little to boost investor sentiment. The Federal Reserve said Monday that industrial output rose 1.3 percent last month, after plunging in September by the largest amount in more than 60 years. Economists, on average, had expected an increase of 0.2 percent, according to a survey by Thomson/IFR.
Still, the improvement wasn’t encouraging enough, said Anthony Conroy, managing director and head trader for BNY ConvergEx Group, adding that investors want a more concrete sign that the economy could be improving.
“I think we’re seeing a tremendous amount of bad economic data,” he said. “Earnings have basically hit a wall and don’t seem like they are coming back any time soon.”
The Dow fell 223.73, or 2.63 percent, to 8,273.58, near its lows of the session. The Standard & Poor’s 500 index fell 22.54, or 2.58 percent, to 850.75, while the Nasdaq composite index dropped 34.80, or 2.29 percent, to 1,482.05.
Analysts say the market is still searching for a bottom after last month’s huge losses and that the pattern of volatility will continue.
Woody Dorsey, president of financial forecasting firm Market Semiotics, said the market is trapped in a seesaw pattern.
“It is a very technical trade,” he said. “The difficulty is there is no dominant positive or negative story that the market is operating on. … There’s nothing here that people can grab on to.”
