New President Elect triggers Wall Street Stocks to tumble ...

Whilst we were busy electing a new president ... wall street was doing its own thing and in the last 2 days wiped 10% of the value of the market.

The plunge was triggered by computer gear maker Cisco Systems warning of slumping demand and retailers reporting weak sales for October. Concerns about widespread economic weakness sent the major stock indexes down more than 4 percent Thursday, including the Dow Jones industrial average, which tumbled more than 440 points.

Major indexes have lost about 10 percent since Barack Obama was elected president — a vote preceded by a steep rally — and the losses represent the Dow's worst two-day percentage decline since the October 1987 crash.

Paper losses during that time in U.S. stocks came to $1.2 trillion, according to the Dow Jones Wilshire 5000 Composite Index, which represents nearly all stocks traded in America.

Comments from Cisco that it saw a steep drop in orders in October and reports from retailers that consumers are skipping trips to the mall provided fresh evidence of the economy's struggles. Worries about automakers and the financial sector compounded investors' unease.

A day ahead of Friday's key October employment report, a widely watched barometer of the economy's health, the Labor Department said the number of people continuing to draw unemployment benefits jumped to a 25-year high. The increase by 122,000 to 3.84 million in late October marked the highest level since late February 1983, when the economy was being buffeted by a protracted recession.

"The economy is in a pretty significant downturn and I think that is broad-based because it is all interconnected," said Ed Hyland, global investment specialist at J.P. Morgan's Private Bank. "This is something that we haven't really seen, this level of this rapid and significant pullback both in the market and the economy."

Thursday's rout follows a drop of more than 5 percent in the market Wednesday that saw the Dow plunge nearly 500 points as investors fretted that weak readings on employment and downcast profit forecasts and job cuts from financial companies to steelmakers signaled broad economic troubles.

Still, the market's two-day slide follows an enormous run-up since last week so some pullback was expected, analysts said. Through the six sessions that ended Tuesday, the benchmark Standard & Poor's 500 index surged 18.3 percent.

Richard Campagna, chief investment officer at Provident Investment Counsel in Pasadena, Calif., contends the market's pullback isn't surprising given the size of the recent run-up, which gave the Dow its best run in 34 years last week. He said the weak economic readings aren't a surprise because of the freeze in credit markets that has disrupted lending and other economic activity since the mid-September bankruptcy of Lehman Brothers Holdings Inc.

Campagna said the light volume and overall fear among investors is exacerbating the market's volatility.

"Some people are pushing this market around more than they should be out of fear," he said. "Many everyday investors are sitting on the sidelines."

"Everyone has been shellshocked with the moves in the market," he said.

The Dow fell 443.48, or 4.85 percent, to 8,695.79 after falling as much as 502 in the final five minutes of trading. The blue chips remain 520 points, or 6.4 percent, above 8,176, their Oct. 27 closing low from the market's yearlong decline.

Broader stock indicators also posted sharp losses. The Standard & Poor's 500 index fell 47.89, or 5.03 percent, to 904.88, and the Nasdaq composite index fell 72.94, or 4.34 percent, to 1,608.70.

Over the past two days, the Dow is down 9.7 percent, the S&P 500 index is off 10 percent and the Nasdaq is down 9.6 percent.

The Russell 2000 index of smaller companies fell 18.80, or 3.65 percent, to 495.84 on Thursday, bringing its two-day decline to 9.2 percent.

Declining issues outnumbered advancers by about 5 to 1 on the New York Stock Exchange, where consolidated volume came to 5.96 billion shares compared with 5.29 billion shares traded Wednesday.

The dollar traded mixed against most other major currencies, while gold prices fell.

Light, sweet crude fell $4.53 to settle at $60.77 a barrel on the New York Mercantile Exchange.

Cisco Systems Inc.'s comments added to investors' nervousness. The world's largest maker of computer networking gear said orders declined sharply last month, suggesting to the market that the weak economy and tight credit markets are taking a larger-than-expected toll on many companies around the world. Cisco fell 45 cents, or 2.6 percent, to $16.94.

A range of industries have been bruised by the economy. Japanese automaker Toyota Motor Corp. lowered its annual profit forecast Thursday to less than a third of what it was in previous fiscal year. Toyota tumbled $13.28, or 16.5 percent, to $67.09. Other automakers fell ahead of quarterly results due Friday and worries about their health. General Motors Corp. tumbled 76 cents, or 13.7 percent, to $4.80, while Ford Motor Co. fell 11 cents, or 5.3 percent, to $1.98.

Among retailers, Wal-Mart fell 64 cents to $53.49 after reporting better-than-expected sales. But most other retailers didn't attract as many shoppers. Limited Stores Inc. fell $1.10, or 9.6 percent, to $10.41 while Ann Taylor Stores Corp. fell $3.09, or 26 percent, to $8.93.

... if you have been effected by the recent turbulence on the markets ... our advice is to 'sit-it-out' ... as there should be some signs of stability returning to wall street in January 2009 ... when a new president moves into the white house ...