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."

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