Stocks dive as Wall St. sees no bailout for broader economy

The financial-system bailout bill may save the banks, but investors today don’t have much hope that it will help the rest of the economy.

Industrial, commodity and transportation stocks are leading the market’s latest dive, after another batch of grim data on the economy deepened worries about recession.

"There’s a lot of gloom and doom out there," said Anthony Conroy, head trader at BNY ConvergEx in New York.

Remember how manufacturing was almost single-handedly keeping the U.S. economy on a growth track? No more. Orders to U.S. factories sank 4% in August, the government said today. And that was before the worst of the credit crunch began to show up in the real economy in September.

"The depth and breadth of this drop in manufacturing orders indicates that the previously encouraging conditions in this sector have deteriorated substantially," said David Resler, economist at Nomura Securities.

The factory data followed Wednesday's awful figures on September auto sales. Most auto makers reported sales off more than 20% from a year earlier.

In the industrial sector today, farm machinery leader Deere was off $6.71, or 14.5%, to $39.59 at about 12:40 a.m. PDT; Reliance Steel lost $5.26, or 14.3%, to $31.52; and mining giant BHP Billiton was off $5.09, or 9.9%, to $46.26, its lowest since March 2007.

Hit the manufacturing sector and you hit the transportation companies that move goods from plant to customer.

Shares of trucking firm Con-way Inc. were down $9.13, or 21.3%, to $33.81 after the San Mateo, Calif.-based company late Wednesday slashed its 2008 operating earnings forecast to a range of $2.60 to $2.80 a share, from a previous range of $3 to $3.40.

"The economy has been battered by an unprecedented confluence of macroeconomic crises, curtailing demand for freight transportation services," said Douglas Stotlar, Con-way’s CEO, in a statement.

The Dow Jones index of 20 transportation stocks was down a stunning 406.77 points, or 8.9%, to 4,169.60 at about 12:40 a.m. PDT, nearly three times the drop in the Dow industrials.

Railroad stocks are plunging along with trucking shares. Union Pacific was down $8.23, or 11.8%, to $61.21.

Another sign that people are giving up hope on the economy: Commodity prices are diving again as investors anticipate waning demand. The Reuters/Jefferies CRB index is off 4.3% to 328.42, its lowest in nearly a year.

Photo: You can make 'em, but can you sell 'em? SUV production at a Ford plant in Wayne, Mich.    Credit: Bill Pugliano / Getty Images

Comments

[Maggie Knowles]

So what? Relax. It's just a recession...