US market's slide continues

The weakest consumer confidence report in more than seven years has sent stocks sharply lower for a second straight session.

Continued profit-taking from this month's big run-up, as well as reaction to more disappointing earnings, also contributed to the decline.

The Dow Jones industrial average closed down 147.52, or 1.6%, at 9,121.98.

It was the index's worst finish in three weeks, when the Dow closed at 9,052.44 on October 9. The index has now lost a total of 423 points over the past two sessions.

Broader stock indicators also dropped. The Standard & Poor's 500 index was off 18.51, or 1.7%, at 1,059.79, and the Nasdaq composite index lost 32.11, or 1.9%, to 1,667.41.

The losses accelerated early in the session when the Conference Board released a survey showing consumer confidence at 85.5 in October, well below the 97 recorded the previous month and the 96 that analysts were predicting. The index compares results to its base year, 1985, when it stood at 100. The October figure is the lowest since February 1994.

The extent of the decline caught market watchers by surprise and intensified concerns that consumers will spend less and already suffering businesses would see profits diminish even more.

Consumer spending accounts for two-thirds of the economy, and many analysts believe strong spending - not the nine interest rate cuts this year or the tax and other government stimulus packages created to stimulate growth - has kept the economy from a recession. A decline such as the one in the October numbers, threatens that.

Two other economic reports due out later this week will also be closely watched. Preliminary third-quarter gross domestic product, due out tomorrow, is expected to show negative growth - if fourth quarter GDP growth is also negative, it would meet the traditional definition of a recession.

Meanwhile, on Friday, the Labour Department releases its October employment assessment.