Stock declines accelerate

NEW YORK (CNNMoney.com) -- Worries about the speed of the economic slowdown resurfaced Wednesday, giving investors a reason to bail out of stocks after the recent rally.

The Dow Jones industrial average (down 59.47 to 12,022.46, Charts) lost 0.5 percent with around 30 minutes left in the session. The blue-chip barometer has closed at record highs in 13 of the previous 21 sessions.

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The broader S&P 500 (down 9.45 to 1,368.49, Charts) index lost 0.7 percent. The tech-fueled Nasdaq composite (down 28.00 to 2,338.71, Charts) lost 1.4 percent. Both indexes hit more than 5-1/2 year highs last week.

"Pretty much all the numbers this morning pointed toward a weaker economy," said Tom Schrader, managing director of U.S. equity trading at Legg Mason.

"In the past weaker economic news was seen as a good thing, because it meant the Fed doesn't have to raise rates again," Schrader said. "But now people are saying they're less concerned about rates and more concerned about a slowing economy."

Stocks rose at the open Wednesday, as investors welcomed falling oil prices and some merger news. But the market lost steam following the release of the morning economic reports, including the surprisingly weak ISM manufacturing report for October.

Released at around the same time as the ISM index, another report showed that construction spending fell 0.3 percent in September, a bigger dip than what economists were expecting.

An earlier report from ADP Employer Services showed that employers added around 128,000 jobs to their payrolls in October, providing an optimistic sign for Friday's widely-watched government employment release.

But after several days of weak economic news, investors opted to focus on the negative, particularly given the market's recent run, said Timothy Ghriskey, chief investment officer at Solaris Asset Management.

However, he said that any pullback would be healthy in light of the market's recent run, and stocks should be able to recharge going forward.

"The backdrop remains positive except for the recent economic news," he said.

A number of tech stocks declined, led by the chip sector. Advanced Micro Devices (down $0.51 to $20.76, Charts), Intel (down $0.26 to $21.08, Charts) and Altera (down $0.68 to $17.76, Charts) were among the losers.

Financial and banking stocks, retail, telecom and biotech rounded out the list of losing sectors.

In merger news, drugstore CVS said it will buy Caremark, a pharmacy benefits manager, for $20.8 billion in stock, confirming earlier media reports that it would do so. Shares of CVS (down $2.58 to $28.80, Charts) slumped 8 percent. Caremark (down $1.49 to $47.74, Charts) lost 3 percent, giving back morning gains.

In the printing services industry, R.R. Donnelley & Sons (up $0.56 to $34.42, Charts) said it will buy rival Banta (up $7.93 to $52.21, Charts) for $1.3 billion in cash.

Automakers were reporting October sales throughout the day, including Ford Motor (up $0.22 to $8.50, Charts), which reported improved results. Shares gained 2.5 percent.

In earnings news, Time Warner (down $0.20 to $19.81, Charts) reported quarterly sales and earnings that rose from a year ago, but were shy of forecasts. The parent of CNNMoney.com also reaffirmed its profit outlook for the full year. Shares were barely lower in the afternoon after falling 2 percent in the morning.

Shares of MasterCard (up $10.90 to $85.00, Charts), the credit card association, rallied 15 percent in active NYSE trading after reporting quarterly earnings and sales that surged from a year earlier and beat estimates.

Garmin (down $8.39 to $45.02, Charts), a maker of navigational devices, slumped over 15 percent in active Nasdaq trading after reporting quarterly revenue that rose from a year earlier, but missed analysts' expectations. The company also reported higher quarterly earnings that met estimates.

Market breadth was negative. On the New York Stock Exchange, losers beat winners five to three on volume of 1.49 billion shares. On the Nasdaq, decliners trounced advancers 11 to five on volume of 1.72 billion shares.

Stocks were mixed Tuesday after disappointing reads on consumer confidence and manufacturing in the Midwest sparked worries about the economy. But the declines were modest at the end of an otherwise strong month - and an unusually strong October - on Wall Street.

U.S. light crude oil for December delivery fell 2 cents to $58.71 a barrel on the New York Mercantile Exchange, after falling in the morning. The price of oil was volatile after the release of a mixed weekly oil inventories report.

Treasury prices rose, lowering the yield on the 10-year note to 4.56 percent from around 4.61 percent late Tuesday. Bond prices and yields move in opposite directions.

In currency trading, the dollar weakened versus the euro and the yen.

COMEX gold for December delivery added $12.20 to $619 an ounce.

Beware choppy waters ahead

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