The Dow Jones Industrial Average dropped 215 points to a five-year low of 7,286 at Wednesday's close. The Standard & Poor's 500 index and the Nasdaq also declined. Analysts blamed the across-the-board tumble on disappointing earnings reports and bearish assessments by brokerages of such prominent companies as General Electric, General Motors, American Airlines parent AMR Corp., and J.P. Morgan Chase. That fueled investor jitters over the economy and possible conflict with Iraq, analysts said.
The layoffs announced by automaker Fiat as part of its restructuring plan cut even deeper than expected. The Italian industrial group said Wednesday that 11,000 workers would lose their jobs, among them the entire staff of an assembly plant near Palermo, Sicily, that's regarded as an important counterweight to the influence of organized crime. Fiat's automotive division is projected to lose about $1.2 billion this year. Its goal is to break even in 2004, although it also could choose to exercise an option to sell an 80 percent stake to General Motors by then.
Abbott Laboratories said it will cut 2,000 jobs and close 10 facilities in a restructuring plan that includes its diagnostics division. About half of the layoffs will be in the US, a spokeswoman said. Abbott is the second-largest maker of medical tests, although several of those were suspended by the Food and Drug Administration after a Lake County, Ill., plant failed to meet quality-control standards.
Another $800 million was set aside by Roche, the pharmaceuticals giant, to settle remaining litigation from its involvement in a decade-long global price-fixing scandal in the sale of vitamins. A fine imposed by the US Justice Department in 1999 and damage awards to major customers cost the company $500 million. Late last year, it set up a $513 million fund to cover still more settlements. A senior executive said the matter was "a difficult legacy" that "casts a shadow over Roche's major achievements."
Ramping up for the year-end holidays, Tesco PLC, the largest retailer and private-sector employer in Britain, said it will add 17,000 more jobs to the payroll. The company operates just under 1,000 supermarkets, convenience stores, and financial services outlets.