Updated from 2:45 p.m. with new stock prices

The market reacted negatively after disappointing earnings reports and downgrades, looming concerns for the financial and automotive sector, and oil spiking up $3.78 to $138.33 a barrel. The major indices were all down about 3.0% each.

The Russell 2000 and the S&P 600 traded in sync with the major indices. The Russell 2000 traded at 698.64, down about 2.5%, and the S&P 600 Small Cap at 370.50, down about 2.2%.

Shares of Lear ( LEA) fell sharply, by 16.3% to $15.16, since Patrick Archambault, an analyst from Goldman Sachs, downgraded the stock to sell from neutral. Patrick fears the Southfield, Mich., auto supplier will continue to struggle, with General Motors ( GM) and Ford ( F) deteriorating in the automotive industry.

Shares of Goodyear Tire ( GT) fell sharply, by 11.2% to $18.22, after announcing its new strategy initiative. The Akron, Ohio-based firm stated that it increased its cost-cut target to more than $2 billion by 2009 from its previous target of $1.8 billion to $2.0 billion. Goodyear also said it plans on investing $1.3 billion to expand in China, Russia and Brazil.

Shares of Photon Dynamics ( PHTN) rose 31.1% to $15.15 after the board agreed to be bought out by Orbotech ( ORBK), an Israeli firm, for $15.60 per share, or $290 million.

In the San Jose, Calif., company's press release regarding the buyout, President and CEO Jeffrey A. Hawthorne had this to say: "By teaming up with Orbotech, which is committed to investing in innovative technologies, we will be able to grow the combined business and improve its competitive positioning as we face a maturing industry."

Research In Motion ( RIMM) fell 13.3% to $123.46 after reporting earnings just shy of analysts' expectations as well as a lower-than-expected outlook.

For the first quarter, the Canadian wireless company earned $482.5 million, or 84 cents per share, compared with $223.2 million, or 39 cents per share, the previous year. Revenue rose to $2.24 billion from $1.08 billion a year earlier. Analysts expected earnings to be 85 cents per share on revenue of $2.27 billion. For the second quarter, RIM expects to earn 84 cents to 89 cents per share on revenue of $2.55 billion to $2.65 billion; analysts estimated earnings of 90 cents a share on revenue of $2.44 billion.

This article was written by a staff member of TheStreet.com.

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