Stocks Nosedive Into the Close, Sink More Than 2.5%

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. The stock rose 5.6% to $24.76.

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. Shares declined 1.9% to $30.99.

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.

AT&T dropped 3.1% to $28.17, and DuPont edged up 0.3% to $23.69.

"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."

Software firm Adobe Systems (ADBE Quote) reported preliminary fourth-quarter results that were ahead of expectations, but also announced plans for an 8% reduction in headcount. Shares skidded 9.3% to $20.44.

Media concern Viacom (VIA Quote) also announced job cuts and said it would put a raise freeze on some senior-level positions. The stock slipped 0.7% to $15.90.

In the pharmaceutical space, Merck (MRK Quote) reaffirmed its 2008 earnings projections but projected 2009 results would fall short of analysts' current estimates, sending shares down 5.5% to $25.