November 12, 2008 / 3:33 PM / 9 years ago

US STOCKS-Market slides as Best Buy adds to economic woe

* 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

* For up-to-the-minute market news, please click on [STXNEWS/US] (Updates to midmorning)

By Ellis Mnyandu

NEW YORK, Nov 12 (Reuters) - 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 Washington.

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. economic activity.

"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 awful."

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 makers.

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)

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