Stocks Slide on Layoffs, Weak Retail Sales

As the financial crisis was felt overseas, the Bank of England cut its key interest rate by one percentage point to 2%, and the European Central Bank reduced its rate to 2.5% from 3.25%. France also announced a $33 billion economic stimulus plan.

Looking at commodities, crude oil was down $2.18 to $44.61 a barrel. Gold was gaining $2.10 to $772.60 an ounce.

Phil Flynn, vice president and energy analyst at Alaron Trading, said that previous growth in demand for oil had been fueled by cheap credit. "With the global slowdown and the unavailability of credit, it's going to be very difficult to maintain those price levels," he said. "Don't be surprised to see $35 a barrel. ... We could be in a new era of lower energy prices for years to come."

He said that after investors realized that the developing world's growth was not insulated from credit troubles among developed countries, "We've gone from running out of oil to having an oil glut. We have more oil than we know what to do with." Flynn said there will eventually be another boom cycle for oil, but it's years away.

Longer-dated U.S. Treasury securities were rising in price. The 10-year note was up 10/32, yielding 2.62%, and the 30-year was adding 18/32 to yield 3.14%. The dollar was losing ground against its major foreign competitors.

Abroad, European exchanges, including the FTSE in London and the DAX in Frankfurt, were trading lower. In Asia, Japan's Nikkei and Hong Kong's Hang Seng finished on the downside.