Stocks fell sharply Wednesday afternoon after weak U.S. labor-market reports and pessimistic forecasts from Intel and Alcoa gave investors reasons to sell after the recent rally. Alcoa's massive job losses and profit warnings from Intel and Time Warner contributed to the session's weakness. Violence in the Middle East and the natural-gas dispute between Russia and Ukraine also were in focus. Plunging oil and gold prices hit energy and metal stocks. In economic news, two weak job-market reports sparked concerns ahead of Friday's employment report by the U.S. government. Private employers cut 693,000 jobs from their payrolls in December, according to ADP. Planned layoffs at companies fell 8.4 percent in December from the previous month but nearly quadrupled from a year ago, according to a separate report from Challenger, Gray & Christmas. The government releases its December jobs report Friday. Employers are expected to have cut 475,000 jobs after cutting 533,000 in November. The national unemployment rate is expected to have risen to 7 percent from 6.7 percent. The government reported Wednesday that the U.S. federal budget deficit likely will rise to a record $1.2 trillion, or 8.3 percent of gross domestic product (GDP), in 2009, not including the cost of the Obama economic stimulus plan, which could cost nearly $800 billion over two years. Light sweet crude oil for February delivery fell $5.95, or 12.3 percent, to $42.63 a barrel on the New York Mercantile Exchange after a U.S. government report showed a bigger-than-expected jump in crude and gasoline supplies last week. The U.S. dollar fell sharply versus the euro and the yen. The Dow Jones industrial average fell 245.40, or 2.7 percent, to 8,769.70. Aluminum maker Alcoa said it will cut 15,000 jobs, or 13 percent of its global workforce, by the end of the year, and its shares fell 10 percent. Most financial stocks declined, including Bank of America and Citigroup. Declining oil prices caused shares of Chevron and Exxon Mobil to fall. The broader Standard & Poor's 500 index fell 28.05, or 3 percent, to 906.65. The technology-heavy Nasdaq composite index fell 53.32, or 3.2 percent, to 1,599.06. Intel shares fell 4 percent after the computer chipmaker posted a second revenue warning and said weaker demand will lower its fourth-quarter revenue. The New York Stock Exchange composite index fell 169.79 to 5,799.05. The American Stock Exchange composite index fell 52.43 to 1,421.46. And the Russell 2000 index fell 17.61 to 497.10.
