Stocks slump in early trading
Dow falls to fresh 3-month lows as investors continue to worry about the government's ability to temper the slowdown.
NEW YORK (CNNMoney.com) -- Stocks slumped early Thursday as ongoing worries about the government's ability to temper the economic slowdown overshadowed a stronger-than-expected retail sales report.
The Dow Jones industrial average (INDU) lost 190 points, or 2.4%, 30 minutes into the session and touched its lowest trading level since Nov. 21 -- what many market pros consider to be the bear market low.
The Standard & Poor's 500 (SPX) index lost 19 points, or 2.4%, and the Nasdaq composite (COMP) lost 25 points, or 1.7%.
Ken Wattret, economist for BNP Paribas in London, said "there's still a bit of a hangover" from Treasury Secretary Tim Geithner's bank bailout plan, which has been panned for its murkiness.
"There's been some disappointment on the details, or the lack of them, from the financial rescue plan," said Wattret. "That's still left a rather negative legacy."
Asian stocks ended mostly lower, with Tokyo's Nikkei index down 3%. European stocks fell in midday trading.
Oil prices fell $1.16 to $34.78 a barrel on the New York Mercantile Exchange. The dollar slipped versus the yen, but rose against the euro and the British pound.
U.S. stocks gained Wednesday after the reports of an agreement between House and Senate conferees on the Obama administration's stimulus plan. The Dow rose 0.6%, the Nasdaq advanced 0.4% and the S&P was 0.8% higher.
Economy: The government reported a gain in January retail sales after six months of decline. Retail sales rose 1% in January, or a gain of 0.9% without auto sales; both figures had been expected to decline after drops of about 3% in December.
The government also released its weekly report on initial unemployment filings, showing 623,000 claims filed in the week ended Feb. 7. This is down from the revised tally of 631,000 the prior week.
Economists had expected claims to have dropped to 610,000 in the week ended Feb. 7.
The monthly report for business inventories comes out after the opening bell. Inventories are expected to have fallen 0.6% for December, according to a consensus of economist opinion from Briefing.com. That compares to a decline of 0.7% in the prior month.
Stimulus: Democratic leaders indicated that the $789 billion compromise stimulus plan could be put to a vote in both the House and Senate by week's end, meeting President Obama's timetable of having the bill ready to sign into law on Presidents Day. The agreement on the measure was reached Wednesday.
Company news: Homebuilder Toll Brothers (TOL, Fortune 500) warned late Wednesday that revenue from building homes will decline by more than half for the quarter ended Jan. 31. The company said home production is at its lowest level in 50 years. Shares fell 2.5% in early trading.
Alcoa (AA, Fortune 500) announced the sale of its stake in mining company Rio Tinto to Aluminum Corp. of China for $1 billion, well above its $300 million current value. Shares of Alcoa, which is trying to boost its balance sheet, slipped in early trading. 
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