Wall Street Gets Whacked

Additionally, the Labor Department said initial jobless claims fell by 6,000 last week to 327,000 claims. Also, the Institute for Supply Management said its manufacturing index fell to a reading of 50.9 last month from 52.0 in September. The number fell short of estimates and was the lowest since March.

The releases were the last before the Labor Department's important monthly nonfarm payrolls report on Friday. Economists expect that the U.S. economy added 80,000 jobs last month.

Treasury prices were rallying as traders moved into the so-called safe haven of bonds. The 10-year note was up 31/32 in price, cutting the yield to 4.35%. The 30-year bond rose 1-26/32 in price, yielding 4.64%. The dollar was giving up ground against the euro.

Overseas markets were mixed. London's FTSE 100 was down 2%, the Paris CAC 40 was off 2%, and Germany's Xetra Dax was 1.7% lower. In Asia, Japan's Nikkei 225 added 0.8% overnight, while Hong Kong's Hang Seng tacked on 0.5%.