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Dow Down On Government Changes, Weak Reports

The Dow Jones Industrial Average fell almost 5% Wednesday, marking the third day in a row of falling stock prices.

The Dow closed at 8,282.66, down 411.30, or 4.73%, while the S&P 500 closed at 852.30, down 46.65, or 5.19%. The Nasdaq closed down 5.17%, or down 81.69, at 1,499.21.

Futures indicated a poor showing before Wednesday's opening bell. Then, news from Best Buy helped drag down stocks. The company said that declines in consumer spending has led to the worst conditions since the company began doing business 42 years ago. Best Buy's stocks dropped 8%, or 1.91, to trade at $21.97.

Large technology companies and old standards alike were affected by Wednesday's drop. Google dropped 6.57%, or $20.46, to close at $291. Microsoft fell 4.25%, or 90 cents, to close at $20.30. Tech stocks closed down across the board, with Internet, chips, and software the hardest hit. The least affected technology companies fell into the contracted services category, but even those closed down more than 2% on average.

Intel shares fell 7.32% in after-hours trading after the company cut its 4Q forecasts by $1 billion.

Old, tried-and-true nontech brands fell as well, evidenced by Heinz, which closed down 2.06% to close at $40.34.

Comments from Treasury Secretary Henry Paulson seemed to amplify the gloomy outlook. Paulson signaled a change in the way the federal government plans to shore up banking. Paulson said he wants to encourage lending with some of the $700 billion in bailout funds, while he backed off plans to buy bad mortgages. Although consumer credit and spending may be badly needed at this point, the government's changes seemed to add to overall fears and uncertainty.

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