* Best Buy slashes outlook, adds to economic woes
* GM, Ford shares jump on bailout hopes
* Paulson set to give update on U.S. rescue package
* Dow off 1.3 pct, S&P 500 off 1.4 pct, Nasdaq off 1.3 pct
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(Updates to midmorning)
By Ellis Mnyandu
NEW YORK, Nov 12 U.S. stocks slid on Wednesday
after Best Buy (BBY.N), the largest U.S. electronics chain,
lowered its outlook, heightening fears about a deeper economic
slump AMD tempering hopes for an auto industry bailout by
Worries about the economy have the broader market pinned in
bear market territory, with the S&P 500 down 40 percent
year-to-date. On October 10, it made a fresh 2008 low, hitting
it's lowest level in more than five years.
Best Buy shares slid 8 percent, underscoring the strains on
consumers whose spending serves as a key pillar of U.S.
"Best Buy's news adds to the fact that, with real estate
and the stock prices down so sharply, the consumer has shunned
some of the shopping they would have done two or three months
ago," said Steve Goldman, market strategist, Weeden & Co in
Greenwich, Connecticut. "The economic data is going to be
The Dow Jones industrial average .DJI slid 115.17 points,
or 1.32 percent, to 8,578.79. The Standard & Poor's 500 Index
.SPX shed 12.60 points, or 1.40 percent, to 886.35. The
Nasdaq Composite Index .IXIC dropped 20.76 points, or 1.31
percent, to 1,560.14.
In addition to consumer-oriented stocks, investors dumped
shares of big manufacturers, including 3M (MMM.N) , down nearly
2 percent at $61.29 on the New York Stock Exchange, and
technology shares, with Apple Inc (AAPL.O), sliding more than 3
percent to $91.59, marking the technology bellwether's sixth
straight daily slide.
American Express (AXP.N) , off nearly 9 percent, was the
top drag on the Dow following a Wall Street Journal report that
the credit issuer, now set to become a bank holding company,
was seeking a cash injection from the government.
Best Buy shares slid to $21.86 after the chain rattled
investors with a bleak outlook, two days after smaller rival
Circuit City Stores Inc CKCRQ.PK filed for bankruptcy
protection. The S&P retail index .RLX was off 2.4 percent.
Even so, investors bet that Washington would provide
desperately needed aid to U.S. automakers, including General
Motors (GM.N), after U.S. House of Representatives Speaker
Nancy Pelosi's said she is seeking legislation to aid the car
Shares of General Motors climbed more than 11 percent to
$3.26, while Ford Motor Co (F.N) gained 7.2 percent to $1.93.
GM, Ford and Chrysler LLC are seeking $25 billion in urgent
federal assistance as their cash burn rates rise.
Investors will listen for any hint about the likely aid for
the automakers when Treasury Secretary Henry Paulson holds a
media briefing to provide an update on the financial rescue
package in Washington at 10:30 a.m. (1530 GMT).
In earnings news, Macy's Inc (M.N) , a department store
operator, posted a narrower-than-expected quarterly loss,
sending its shares up almost 3 percent at $9.68.
Signs that the global economic slump was deepening also
emerged from Europe, where the Bank of England forecast the
British economy will shrink sharply next year and inflation
could fall to just below 1 percent in two years, suggesting
further interest rate cuts to come. [ID:nLV388920
(Editing by Kenneth Barry)