The S&P 500 and Nasdaq each tumbled nearly 9% Monday after sad reports forward U.S. manufacturing sentiment and construction spending

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Different month, same stock market.

U.S. funds suffered a attentive sell-off on the first day of December, and closed at their overcome levels of the session. The large-cap S&P 500 index and the technology-heavy Nasdaq complex exponent each sank nearly 9%. The declines in major U.S. indexes erased most of the gains from the market’s five-session rally.

On Monday, the Dow Jones industrial average finshed lower by 679.95 points, or 7.7%, at 8,149.09. The broad S&P 500 index dropped 80.03 points, or 8.9%, to 841.35. The tech-heavy Nasdaq composite index sank 137.50 points, or 8.95%, to 1,398.07.

Things were even worse in other corners of the market. The S&P MidCap 400 fore-finger tumbled 10.9% Monday.

The U.S. stock market “is facing a just discovered circuitously of selling pressure as the financial picture is compose a question mark,” said Jay Collins of DT Trading in Chicago. “[The U.S. jobs report] due forward Friday is the news story of the week and is expected to reinforce the cheerless jobs picture that lies ahead.”

“The downturn happened so fast today in that place wasn’t much turn up to posture for it,” said S&P technical analyst Chris Burba.

Wall Street was spooked through fresh reminders of economic weakness in the U.S. and around the globe. Among the items driving the selling: A give out released Monday by means of the Institute of Supply Management showed that U.S. manufacturing contracted at the steepest rate in 26 years in November. Another reports showed construction spending slumping in October.

To put an exclamation point on the administration’s troubles, the National Bureau of Economic Research’s occupation cycle dating committee, widely recognized as the arbiter of U.S. recessions, said the good husbandry began its current downturn in December, 2007.

Meanwhile, Treasuries experienced an enormous rally as investment capital flowed heavily

out of equities. Traders cited speculation of more rate cuts by the Federal Reserve and possibly government purchases of Treasuries in order to keep yields down and support lending.

Oil futures plunged to finish below $50, their lowest close in three years. The U.S. dollar index was higher. Gold futures plunged on make necessary worries.

Fed Chairman Ben Bernanke said Monday that the central course will act as needed to preserve the viability of key institutions and that

further interest-rate reductions are “certainly feasible.” Bernanke aforesaid the thrift remains under “considerable stress” and acknowledged that the Fed’sitting various liquidity programs have failed to return private credit markets to normal.

Also, U.S. retail data from the first weekend of the holiday shopping season were mixed and “not really impressive” according to S&P MarketScope.

On the New York Stock Exchange Monday, 28 public funds were lower in price in opposition to each four that posted gains. The proportion upon the body the Nasdaq was 24-4 negative.

Equity markets in Europe finished sharply grow less, with major indexes the floor 5.2% in London, 5.9% in Frankfurt, and 5.6% in Paris registering declines. Asian markets ended mixed, with Tokyo stocks falling 0.9%, Hong Kong climbing 1.6%, and Shanghai gaining 1.3%.

Wall Street looked to news on the sell in small quantities sector as the all-important holiday shopping season kicked off on Friday, Nov. 28. “We believe consumers remained spooked by the agency of market turmoil and refrained from shopping during [November]. We are projecting one of the weakest Holiday shopping seasons on memorandum,” wrote Merrill Lynch analyst Lorraine Maikis in a note Monday.

Technology shares were hard-hit Monday. Intel (INTC) was amidst the stocks leading the tendency of action lower with a decline of 9%. The Semiconductor Industry Association reported Monday that worldwide sales of semiconductors declined 2.4% in October to $22.5 billion compared to sales of $23.0 billion in October, 2007.

Among the other industry groups hard-hit in Monday’s session: The S&P Investment Banking & Brokerage index implacable 15.2% as Ladenburg Thalman analyst Richard Bove cut his earnings estimate for Goldman Sachs (GS), citing the impact of changes in the value of the company’s holdings in China and Japan.

The S&P Oil & Gas Exploration & Production index plummeted 14.8% amid the excruciating decline in crude oil futures.

The Diversified Metals & Mining index slumped 12%. Bloomberg reported that copper fell for a second day in Shanghai hinder China’session lessening in manufacturing signaled the extending danger of a slump in the world’session biggest consumer of the metal. The S&P Gold index fell 8.1% amid a sharp drop in prices for the yellow metal.

The Automobile Manufacturers index dropped 8.7% amid fresh developments in the beleaguered sector. Ford Motor Co. (F) announced that it be inclined re-evaluate strategic options for Volvo Car Corp., including the possible sale of the Sweden-based recompense automaker. Ford said the decision comes in response to the significant marasmus in the global auto industry singly in the past three months and severe household instability worldwide.

General Motors’ (GM) management on Sunday was racing to finalize a viability project to take to Congress, with a boardroom hellbent on securing a treaty rescue loan, according to a Wall Street Journal report. At the same time, directors — diverse chief executive Rick Wagoner — are also insisting that all options stay in continuance the table, including a Chapter 11 bankruptcy filing, if a bailout doesn’t come through, said the Journal.

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