Stocks Slide on Layoffs, Weak Retail Sales

Updated from 2:59 p.m. EST

After fluctuating throughout much of Thursday's session, stocks on Wall Street took an afternoon dive as a slew of big-name companies announced layoffs, many retailers posted weak November same-store sales and the automakers appeared before Congress in search of a government bailout.

The Dow Jones Industrial Average was falling 266 points to 8325, and the S&P 500 was down 32 points to 839. The Nasdaq slipped 59 points to 1433.

The automakers were again in focus on Thursday. Earlier in the week, General Motors (GM Quote), Ford (F Quote) and Chrysler headed to Capitol Hill to seek government help as they navigate a precarious market climate. On Thursday, the CEOs of the Big Three once again were testifying before Congress about potential bailout legislation.

The Wall Street Journal reported that the Federal Reserve may refuse to lend directly to the automakers, a decision that would hand the companies' futures over to Congress and the Bush administration.

Layoffs and salary reductions also were dominating the day's early headlines. Executives at Citigroup (C Quote), along with director and senior adviser Robert Rubin, were willing to go without bonuses this year, according to a report by the Financial Times.

Swiss bank Credit Suisse (CS Quote) announced plans to cut 5,300 jobs and said it expects to report a $2.5 billion fourth-quarter loss.

In other financial-sector news, The Wall Street Journal reported that credit card company Capital One (COF Quote) intends to buy Chevy Chase Bank for $520 million in a cash-and-stock deal.

The bout of layoffs and tempered guidance was not confined to the financials. Telecom company AT&T (T Quote) announced workforce reductions of 12,000, or about 4% of its employees, while DuPont (DD Quote) set plans to cut 2,500 workers.

"I'm not surprised," said Fred Dickson, chief market analyst at DA Davidson. "Given the depth of the recession, we're just going to see more of the same over the next three to six months." He also said that AT&T's planned layoffs, at 4%, weren't shockingly large, however. "In a given year, that may be close to a normal turnover amount anyway."