Dow Sinks 411 Points as Investor Nerves Fray

As for technology companies, Microsoft (MSFT Quote) is working on a deal with Verizon (VZ Quote) to provide the default search software for Verizon Wireless' phones, according to a report by the Journal. Microsoft shares lost 4.3% to $20.30, and Verizon gave back 2.6% to $28.96.

Among corporate earnings, Dutch financial firm ING (ING Quote) swung to a quarterly loss on losses related to the financial crisis. Shares fell 7.6% to $9.41.

In retail, department store operator Macy's (M Quote) announced a third-quarter loss on declining sales. Elsewhere among merchants, electronics vendor Best Buy (BBY Quote), citing declines in consumer spending, lowered its earnings forecasts for the remainder of its fiscal year.

Macy's dropped 11% to $8.37, and Best Buy slumped 8% to $21.97.

Turning to economic forecasts, the Bank of England predicted a decline in Britain's inflation to below 2% next year, but also said that inflation could decline yet further on an economic downturn.

Looking at commodities, crude oil declined $3.17 to settle at $56.16 a barrel, as the International Energy Agency predicted global energy demand would rise 1.6% annually between 2006 and 2030 and called for new investments to avert a supply shortage. Gold was down $14.50 to close at $718.30 an ounce.

Longer-dated U.S. Treasury securities were rising in price. The 10-year was up 25/32 to yield 3.65%, and the 30-year was up 12/32, yielding 4.17%. The dollar was higher vs. the euro and pound but losing ground against the yen.

Overseas, European exchanges, such as the FTSE in London and the DAX in Frankfurt, were trading lower. As for Asian markets, Japan's Nikkei and Hong Kong's Hang Seng closed on the downside.