Updated from 4:05 p.m. EDT

Stocks plunged Thursday, erasing the previous day's rally, as a sharp fall in crude prices ripped energy shares and the broader market coped with spotty earnings.

The Dow Jones Industrial Average tumbled 133.03 points, or 1.28%, to 10,281.10, the worst single-session point loss since June 23. The S&P 500 shed 17.96 points, or 1.5%, to 1177.80 while the Nasdaq Composite fell 23.13 points, or 1.11%, to 2068.11.

"With lower energy and no follow-through, the market just rolled over," said Jay Suskind, head of institutional equity trading with Ryan Beck. "There's still the same headwinds, with higher inflation fears, as well as fourth-quarter earnings concerns."

Another factor for stocks was the Philadelphia Federal Reserve's report on regional manufacturing activity, which showed healthy expansion but saw a pricing gauge spike to its highest level since 1980. Higher prices for manufactured goods were more widespread, suggesting costs are being passed on to consumers.

Twenty-three of the 30 Dow components fell, led by Pfizer ( PFE), which lost 8.6%; McDonald's ( MCD), which lost 3.8%; ExxonMobil ( XOM), which fell 3.5%; and American Express ( AXP), which lost 3.3%.

After a rousing bounce Wednesday, stocks fell back to earth just as fast. Energy shares were among the biggest losers as crude's flirtation with $60 a barrel sparked valuation concerns in the sector. The Philadelphia Stock Exchange Oil Service index finished down 2.8%, while the Amex Oil Index tumbled 4.7%.

"It's actually a healthy correction for the oil stocks," said Dave Briggs, head of equity trading with Federated. "It's creating a great buying opportunity."

Oil was taken down by a bearish report on natural gas inventories. On Nymex, crude for November delivery lost $1.38 to $61.03 a barrel, the lowest close since the end of July. The contract dipped below $60 earlier in the session. Part of the plunge also reflected Hurricane Wilma, which continued to move away from Gulf of Mexico energy infrastructure.

"People like to worry in October, when we hear about how high energy prices will cancel Christmas," said Briggs. "The commodity itself has come off its peak after the hurricanes. We built up the price on demand and now that demand is slacking."

Banks and chain stores, both of which led Wednesday's 1.5% rally on the S&P 500, turned negative at midafternoon and finished lower.

"There's a lot of talk that yesterday's move was a bear trap that didn't convince people," said Suskind.

In other markets, the 10-year Treasury was up 3/32 in price to yield 4.45%, while the dollar hovered against the yen and euro.

About 1.93 billion shares traded on the New York Stock Exchange, with decliners beating advancers by a 3-to-1 margin. Trading volume on the Nasdaq was 1.81 billion shares, with advancers outpacing decliners 2 to 1.

eBay ( EBAY) was rocked after saying fourth-quarter earnings will total 21 cents a share before items, about a penny shy of estimates. The outlook came in an otherwise solid third-quarter release in which the online auctioneer posted a 40% year-over-year rise in profits and a 37% jump in sales. eBay finished lower by $2.86, or 6.8%, to $39.15.

Peter Cardillo, chief market analyst with S.W. Bach & Co, says that as earnings continue to pour in, "we're seeing meek fourth-quarter outlooks even as this quarter's reports are coming in good."

Elsewhere in tech, Nokia ( NOK) said third-quarter net rose 29% from a year ago to $1.06 billion, beating estimates. The mobile-phone company also reported an 18% rise in sales to $10.08 billion and said its unit volume should grow in the fourth quarter at a faster rate than the rest of the industry. Still, the shares lost about 6% as invetors worried about Nokia's pricing power in less-developed countries. Nokia lost $1.15, or 6.7%, to $15.90.

Pfizer's third-quarter earnings fell 52% from a year ago to $1.59 billion, or 22 cents a share, reflecting a number of acquisition and restructuring charges. The drug company's adjusted earnings of 51 cents a share were down 7% from last year but still beat forecasts.

Pfizer guided earnings lower for the year, citing weakness in drugs aimed at cholesterol and erectile dysfunction. Pfizer sees full-year adjusted earnings of $1.92 to $1.94 a share, below the Thomson First Call consensus of $1.98 a share. The stock dropped $2.07, or 8.6%, to $21.90.

A bright spot came after the bell Thursday, when Google ( GOOG) posted third-quarter earnings that handily beat estimates. The Internet company reported a profit of $382 million, or $1.32 a share, up from $52 million, or 19 cents a share, last year. Net revenue, excluding traffic acquisition costs, reached $1.05 billion.

Google said its earnings based on non-generally accepted accounting principles were $1.51 a share, up from $1.33 in the second quarter. The Thomson First Call consensus was for a profit of $1.36 a share on revenue of $943 million. While the stock finished down $5.50, or 1.8%, to $303.20, it was trading up in the after-hours session.

Dow component Coca-Cola ( KO) said third-quarter earnings rose 37% from a year ago to $1.28 billion, or 54 cents per share, on an 8% rise in revenue to $6.03 billion. Excluding items, Coke earned 57 cents a share. Analysts were forecasting earnings of 53 cents a share on sales of $5.95 billion. Coca-Cola rose 30 cents, or 0.7%, to $42.10.

McDonald's finished lower after the company posted earnings that matched analysts' forecasts. The fast-food company posted third-quarter earnings of $735.4 million, or 58 cents a share, down from $778.4 million, or 61 cents, last year. Revenue rose 8% to $5.33 billion from last year, beating the Thomson First Call consensus of $5.25 billion. McDonald's was down $1.29, or 3.8%, to $32.40.

Ford Motor ( F) swung to a third-quarter loss of $284 million, or 15 cents a share, compared with a proft of $266 million, or 15 cents a share, a year ago. The company had an operating loss of $191 million, or 10 cents a share, vs. operating income of $515 million, or 27 cents a share, a year earlier. Analysts anticipated a loss of 10 cents a share, according to Thomson First Call. Sales in the quarter rose to $40.9 billion from $39.1 billion last year.

Looking ahead, Ford expects full-year 2005 earnings, before items, in a range between $1 and $1.25. The Thomson First Call consensus stands at $1.05. Shares fell 5 cents, or 0.6%, to $8.42.

Southwest Air ( LUV) said third-quarter earnings rose to $227 million, or 28 cents a share, from $119 million, or 15 cents a share, last year. The latest quarter included $87 million in gains, before which the company earned 21 cents a share -- 3 cents better than forecasts. Southwest lost 51 cents, or 3.3%, to $15.07.

On Friday, AT&T ( T), Caterpillar ( CAT), Maytag ( MYG) and RadioShack ( RSH) are all scheduled to report earnings. Dow component Caterpillar is expected to post third-quarter EPS of $1.06, up from 71 cents a share a year ago.

On the economic front, the Labor Department said jobless claims fell by 35,000 to 355,000 for the week ended Oct. 15. The less volatile four-week moving average fell by 20,000 to 376,000. The Labor Department said 40,000 of the first-time claims were related to Hurricanes Katrina and Rita.

Also, the Conference Board said that leading economic indicators for September fell 0.7%. The indicators were expected to fall by 0.5% after a 0.2% decline in August.

"It is not clear this report tells us much about the future," said Ian Shepherdson, chief economist with High Frequency Economics. "What matters is how quickly the economy absorbs the effect of the hurricanes. Already, it looks as though the October LEI will reverse a good part of the September drop."

Atlanta Fed President Jack Guynn spoke at a meeting in Atlanta, saying that "the risks to inflation are elevated," but that he believes price increases "are likely transitory and will not significantly change the long-term inflation outlook."

"In the wake of the hurricanes, our economy faces new uncertainties related to higher energy costs and economic data that may be harder to interpret," said Guynn. "At this point, I believe inflation and inflation expectations will be largely contained by competitive market forces and continuing adjustments to the stance of monetary policy."

"The main bugaboo is continued hawkish speak from Fed governors," said Al Goldman, chief market strategist with A.G. Edwards. "The market is afraid the Fed will overdo it, precipitating a more serious pullback in the economy. We're in a very nervous environment and it doesn't take much to disturb people."

Overseas markets were mostly higher following yesterday's late-session rally in New York. London's FTSE 100 was down 0.1% to 5164, and Germany's Xetra DAX added 0.4% to 4864. In Asia, Japan's Nikkei rose 0.5% overnight to 13,190, while Hong Kong's Hang Seng added 1.3% to 14,409.

To view Gregg Greenberg's video take on today's market, click here .

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