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ROAD TO RESCUE

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Presidential priority: The economy

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NEW YORK (CNNMoney.com) -- Stocks slumped Thursday morning, as weak readings on the labor market and a slew of dismal sales reports from the nation's retailers exacerbated fears of a prolonged recession.

The Dow Jones industrial average (INDU), the Standard & Poor's 500 (SPX) index and the Nasdaq composite (COMP) all declined in the early going.

The Labor Department reported that 481,000 initial jobless claims were filed in the week ended Nov. 1. That was a decline of 4,000 from the prior week, but it's still worse than expected. Initial unemployment benefit filings were expected to ease to 476,000 last week from the originally reported 479,000 the week before, according to a consensus of economists surveyed by Briefing.com.

The economy is front and center again after Barack Obama's historic presidential victory. Investors seem to know that he's got plenty of work ahead in fixing the economy.

The Dow plunged 5% on Wednesday, following the Democratic victory on Election Day, when the blue-chip measure gained more than 3%.

Investors were especially wary ahead of Friday's October jobs report. Slashed sales guidance from tech bellwether Cisco Systems also added to jitters.

Wal-Mart (WMT, Fortune 500) announced that same-store sales rose 2.4% in October, topping the retail giant's expectations. However, other retail reports were more dismal, with consumers holding back amid the weak economy.

Later this week, Obama is expected to announce key staff appointments for his new administration, which begins on Jan. 20.

Economy: On Friday, the Labor Department's jobs report is expected to show that the economy shed 200,000 jobs last month, according to the Briefing.com consensus. The unemployment rate is expected to climb to 6.3% from 6.1% and match the worst reading of the decade.

Unemployment is one of the biggest economic challenges President-elect Obama faces. Economists say it will be hard to create jobs during his first year, no matter what steps he takes.

Companies: Cisco (CSCO, Fortune 500) said Wednesday it froze hiring and slashed sales targets for the current quarter. The company announced the news after the market close, and shares fell 5% in after-hours trading.

Rupert Murdoch's News Corp. (NWS.A) reported a 30% drop in quarterly net income late Wednesday. The media giant said it was hit by a large write-down and a decline in ad sales at its TV stations.

World markets: Asian markets sank, with shares in Tokyo, Hong Kong and Seoul all shedding about 7%. European stocks tumbled in morning trading, but partly recovered after the Bank of England cut its lending rate by 1.5 percentage points to 3%. The European Central Bank cut its lending rate by half a percentage point to 3.25%.

Oil and money: Oil prices dropped $1.64 a barrel to $63.66 on the New York Mercantile Exchange on sluggish demand from a weak economy. The U.S. dollar rose versus the euro but dropped against the British pound and the yen.

Did you vote for Obama? How do you think the new president will affect your wallet? What do you think Obama needs to do to fix the economy - both in the short run and the long term? What should be first on the new Congress's agenda? E-mail us your thoughts, including your name, photo and contact info; the best answers will be featured in an upcoming CNNMoney.com article.