Stocks Get Roughed Up

Among the worst performing sector indices, the NYSE Financial Index dropped 4.2%, the Philadelphia Housing Sector Index slumped 3.9%, and the Dow Jones Transportation Average fell 3.2%.

Washington Mutual (WM Quote) was the weakest of the financial names, plummeting 17.3%. Bear Stearns (BSC Quote), Morgan Stanley (MS Quote), Lehman Brothers (LEH Quote) and Bank of America (BAC Quote) lost 4.9% or more on the day.

Breadth was decidedly negative. On the New York Stock Exchange 3.11 billion shares changed hands, as decliners toppled advancers by a 10-to-1 margin. Volume on the Nasdaq reached 2.49 billion shares, with losers beating winners nearly 4 to 1.

Little help was found on the earnings docket. Dow component General Motors (GM Quote) posted a staggering third-quarter net loss of $39 billion, or $68.85 a share. Excluding items, the company lost $2.80 a share, well below the Thomson First Call estimate.

Shares of GM dropped $2.21, or 6.1%, to $33.95. Rival Ford (F Quote), which reports its results Thursday, lost 4.5%. Toyota (TM Quote) slipped 0.3% despite reporting a rise in second-quarter profits.

Also, Time Warner (TWX Quote) reported a 53% decline in third-quarter earnings compared to a year ago. Excluding items, the media giant earned 24 cents a share, matching Wall Street's estimates. Time Warner shares were off 53 cents, or 2.9%, to close at $17.80.

Following the close, Cisco (CSCO Quote) sank after its solid quarter and in-line guidance failed to impress investors. Dow component AIG (AIG Quote) was also due to report quarterly earnings.