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Dow Loses 700 Again

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By TIM PARADIS

The Associated Press

Published: October 16, 2008

NEW YORK - Investors agonizing over a faltering economy sent the stock market plunging all over again Wednesday after two disheartening reports convinced Wall Street that a recession, if not already here, is inevitable. The market's despair - fed by a stream of disheartening economic data - propelled the Dow Jones industrials down 733.08 points to 8,577.91 in its second-largest point loss ever. The major indexes all lost at least 7 percent.

The slide meant the Dow, which lost 76 points Tuesday, has given back all but 126 points of its record 936-point gain Monday, which came on optimism about the banking system in response to the government's plans to invest up to $250 billion in financial institutions.

Wednesday's sell-off began after the government's report that retail sales plunged in September by 1.2 percent - almost double the 0.7 percent drop analysts expected - made it clear that consumers are reluctant to spend amid a shaky economy and punishing stock market.

The Commerce Department report was sobering because consumer spending accounts for more than two-thirds of U.S. economic activity. The reading came as Wall Street was refocusing its attention on the faltering economy after the stepped-up government efforts to revive the stagnant lending markets.

Then, in the afternoon, the release of the Beige Book, the assessment of business conditions from the Federal Reserve, added to investors' angst. The report found that the economy continued to slow in the early fall as financial and credit problems worsened. The Fed's report supported the market's belief that difficulties in obtaining loans have choked growth in wide swaths of the economy.

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