The Dow dropped below 8,700 points, extending the losing streak that has seen it lose 15%. The index is down 35% from its record a year ago.
The decline was led by shares of automaker General Motors (GM), which fell today to their lowest level since 1950, after they reported that European car sales have fallen for the first nine months of this year, report David Bailey for Reuters. Forecasters J.D. Power and Associates and Global Insight lowered their expectations for the auto sector for this year, and predicted a slow recovery.
GM is the largest U.S.-based automaker.
Tight credit is spreading throughout the markets and exacerbating the downturn. Companies are finding it hard to secure financing, constraining business spending. Unemployment stands at 6.1%, while economists expect an average of 74,000 job losses a month for the next 12 months.
The Volatility Index (VIX) hit a new record today, topping 60. The index measures the cost of using options as insurance against declines in the S&P 500. The S&P today dropped below its level from 10 years ago, erasing a decade of gains, and then some.