Bears Dig Deeper Hole for Stocks

Updated from 12:11 p.m. EDT

Stocks in New York were taking a pounding Wednesday, as corporate earnings again took center stage and concerns of a global slowdown increased.

The Dow Jones Industrial Average dropped 352 points to 8680, and the S&P 500 was down 43 points to 912. The Nasdaq stumbled 48 points to 1648.

Investors are having difficulty finding sectors that will lead a new rally, wrote Robert Pavlik, chief investment officer at Oaktree Asset Management. He wrote that as traders remain on the sidelines trying to find winners, volume has fallen substantially, causing an increase in volatility. "Because of this uncertainty, it brings into question whether or not we go back and retest the lows of October 10," he wrote.

Peter Cardillo, chief market economist at Avalon Partners, said earnings have been mixed, but forward guidance is weighing on investor sentiment. "I think it's just one more excuse in a bear market," he said.

Cardillo said that stocks need a new catalyst to turn sentiment. Investors may take heart if the settlement of credit-default swaps tied to bankrupt brokerage Lehman Brothers are settled without major defaults. "Obviously this market is way oversold. All we're seeing here is a market that continues to feel the weight of uncertainty."

Following Tuesday's close, traders heard from some big technology names. Apple ( AAPL) reported a 26% increase in third-quarter earnings. Strong iPhone sales contributed to the improvement, but the company worked to temper expectations for the fourth quarter on a slowing economy.

Internet portal Yahoo! ( YHOO) also announced third-quarter earnings, saying profit declined 64%. The company also said it would cut at least 1,500 jobs this year.

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