Selloff Continues

News at a Glance

• No Relief: Major indexes fall for sixth straight session.
• Fed Cuts: Drops Rate to 1.50% in global initiative.
• Retail Retreat: Sales drop at chains; discounters do best.
• Still in Gear?: Toyota maintains global sales goals.

The Lowdown

In an emergency move to promote global market stability, the Federal Reserve slashed the federal funds rate by 50 basis points to 1.50% ahead of its regularly scheduled meeting, but the action did little to halt the market's skid as equities fell for the sixth straight session.

Stocks took a late drop Wedensday after a volatile session, in which traders digested the stimulative move by the central bank, weak retail sales data and a surprisingly strong housing report. In the end, fear and panic maintained their grip on the major indexes. The Dow Jones Industrial Average recorded its fifth consecutive triple-digit loss, falling 189 points to 9258. The Nasdaq gave back 15 to end the day at 1740, and the S&P 500 slipped 11 to 985.

The heaviest losses came in financials and telecoms. Consumer staples and cyclicals also lost ground after retailers released disappointing monthly sales results. Materials and energy were the lone bright spots. Techs reversed their early gains.

Before the opening bell, the Fed slashed interest rates in response to the market's most recent collapse, a losing streak that had claimed more than 15% of the Dow's value before today's losses. The Fed pointed to "a weakening of economic activity and a reduction in inflationary pressures" in its statement released Wednesday morning before the opening bell.

"Incoming economic data suggest that the pace of economic activity has slowed markedly in recent months," The Fed added. "Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit."

The Fed's move is part of a coordinated effort on the part of the world's central banks to maintain price stability. The Bank of Canada, the Bank of England, the European Central Bank, Sveriges Riksbank and the Swiss National Bank each made cuts to their key rates, as well.

The nation's retailers did little to combat the notion that the economy remains on the decline. Sales at mall chain stores fell in September. Discounters Wal-Mart (WMT) and Costco (COST) posted sales gains as consumers sought out value, however their revenues were still a bit below analysts' estimates.

Gold prices fluctuated as stocks ebbed and flowed. By 4 p.m., gold had gained $28.90 on the day at $910.90 an ounce.

In energy, crude oil futures slipped $1.41 on the day to $88.65 a barrel.

Corporate News

• Alcoa (AA) posted a 52% decline in third-quarter net income, citing tighter margins on lower aluminum prices. Alcoa, the first Dow component to report, earned $268 million, or 33 cents a share, down from $555 million, or 63 cents a share, in the year-ago period, the firm said.
• Citigroup (C) is looking for partners in its effort to acquire Wachovia (WAC), The Wall Street Journal reported, citing anonymous sources. The bank is entangled with Wells Fargo (WFC) in a battle for Wachovia's properties and businesses. Under one scenario, Citi would take over the firm's branches in the Northeast and Midatlantic, while Wells Fargo would get Wachovia's other branches, as well as its brokerage and wealth management units.
• Toyota (TM) maintained its global sales goals for the remainder of the year, despite an article in Japan's Nikkei business daily suggesting the firm would have trouble achieving them, the Associated Press reported. Senior Managing Director Yoichiro Ichimaru did not comment on the report but said a slowdown in U.S. sales was making its goals more challenging.

The Economy

• The Pending Home Sales Index, a leading indicator for the housing market, rose 7.4% in August, up from a 2.4% decline in July, the National Association of Realtors said. Economists had expected a 1.2% decline. DATA
• Crude inventories rose by 8.1 million barrels last week, lifting them into the upper half of the average range for this point in the year, the Energy Department said. REPORT

ReadMe

• The Wall Street Journal on the presidential debate: The candidates took occasional breaks from blaming each other for the financial crisis to present their plans to defuse it. STORY
• BusinessWeek on IndyMac: The the Federal Deposit Insurance Corp.'s new refinancing program is helping IndyMac borrowers restructure their mortgages and remain in their homes. STORY
• Slate on the credit crisis: Some conservatives argue that the root of the credit crunch is the Community Reinvestment Act, which opened doors for subprime borrowers, but that case is dubious. STORY

WatchMe

• Bloomberg on the election: McCormack, head of Asian sovereign ratings at Fitch Ratings, says the economy has taken center stage in the race. VIDEO
• CNBC on the debate: Rep. Debbie Wasserman Schultz (D-F.), Larry Kudlow, Melissa Francis and John Harwood discuss the candidates' performances. VIDEO
• Biography: Sens. Barack Obama (D-Ill.) and John McCain (R-Ariz.) are profiled. BIO, 8 p.m.