* Cisco outlook, retail sales heighten recession fears
* Target drops on worse-than-expected sales
* Jobless claims dip but labor market stress persists
* Dow off 4.9 pct, S&P off 5 pct, Nasdaq off 3.3 pct
(Updates to close)
By Leah Schnurr
NEW YORK, Nov 6 (Reuters) - U.S. stocks sold off on
Thursday in the worst two-day slide since October 1987 with
disappointing corporate outlooks and bleak sales from major
retailers fueling fears of a deepening economic downturn.
Underscoring concerns about anemic consumer spending
heading into the holiday season, retail chains posted the
worst monthly sales data in more than three decades as
consumers, beleaguered by the financial crisis, slashed
spending in October.
Target <TGT.N> and other discounters reported
larger-than-expected drops in same-store sales, sending Target
down 6 percent. An S&P index of retailers <.RLX> sank 5.4
percent.
"This downward spiral of negative feedback is spreading to
the economy as a whole and to the consumer, and that's not a
positive sign for stocks," said Bucky Hellwig, senior vice
president at Morgan Asset Management in Birmingham, Alabama.
"Those are things that there's really no quick fix for and
we're seeing that discounted in the market."
Cautious investors looked ahead to Friday's jobs payroll
data, which is expected to further underscore the weakening
economy after weekly jobless claims fell but still showed
serious labor market strains.
The broader market, measured by the S&P 500, experienced
its worst two-day slide since October 1987. Despite a strong
rally on Election Day earlier in the week, the market has not
been able to make much headway following a disastrous
October.
The Dow Jones industrial average <> tumbled 443.48
points, or 4.85 percent, to 8,695.79. The Standard & Poor's
500 Index <.SPX> dove 47.89 points, or 5.03 percent, to
904.88. The Nasdaq Composite Index <> shed 72.94 points,
or 4.34 percent, to 1,608.70.
Cisco Systems <CSCO.O> lost 2.6 percent to close at $16.94
on Nasdaq after it said following Wednesday's closing bell
that revenue could fall as much as 10 percent in the current
quarter.
Chevron <CVX.N> was the biggest drag on the Dow, sliding
6.4 percent to $70.11 on the New York Stock Exchange as the
price of oil slid on concerns that demand will suffer during a
recession. U.S. front-month oil futures <CLc1> dropped $4.53
to settle at $60.77 a barrel on the New York Mercantile
Exchange.
The U.S.-listed stock of News Corp <NWSa.N> dove 15.6
percent to $8.26 on the NYSE after the Australian media
conglomerate cut its full-year forecast.
Shares of General Motors <GM.N> slid 13.7 percent to $4.80
as U.S. auto executives were set to meet with a top lawmaker
to seek urgent aid to weather the global slowdown.
Ford <F.N> was down 5.3 percent at $1.98.
Japanese rival Toyota Motor Corp <7203.T><TM.N> more than
halved its profit forecasts as the financial crisis batters
demand for its cars. Toyota's U.S.-listed stock skidded 16.5
percent to $67.09 on the NYSE.
Discount retail chain Target shed 6 percent to $35.47.
Among other retailers that posted a decline in same-store
sales, mid-priced department store operator J.C. Penney
<JCP.N> fell 1.5 percent to $21.90, and luxury retailer Saks
Inc <SKS.N> lost 5.3 percent to $5.16.
Trading was moderate on the New York Stock Exchange, with
about 1.53 billion shares changing hands, below last year's
estimated daily average of roughly 1.90 billion, while on
Nasdaq, about 2.39 billion shares traded, above last year's
daily average of 2.17 billion.
Declining stocks outnumbered advancing ones on the New
York Stock Exchange by a ratio of about 5 to 1, while on the
Nasdaq, about 11 stocks fell for every three that rose.
(Editing by Jan Paschal)
