By DAVID JOLLY and BETTINA WASSENER THE NEW YORK TIMES Thursday, October 16, 2008 Shares in New York opened lower on Wednesday, following markets in Europe, as investors begin to face the likelihood that serious dislocations will plague the global economy even if the coordinated bailouts announced this week succeed in restoring confidence to credit markets. In New York, investors were also digesting economic reports that reinforced concerns about a slowdown. In the first report, the Commerce Department said that retail sales decreased 1.2 percent last month, nearly double the 0.7 percent drop that had been expected. In the second report, the Labor Department said that core wholesale prices, which exclude volatile food and energy costs, rose 0.4 percent, above analysts’ expectations of a 0.2 percent increase. Shortly after the open, the Dow Jones industrial average was down 219 points, or 2.3 percent, and the broader Standard & Poor’s 500-stock index was down 3 percent. The technology heavy Nasdaq was down 2.2 percent, after the chipmaker Intel reported a profit for the quarter, but noted weaker-than-expected sales of chips used in corporate computers. Credit market indicators showed improvement, with the so-called Ted spread, the gap between yields on three-month government securities and the rate that banks charge each other for loans of the same duration, fell 6 points to 4.30 percentage points. Analysts say a spread below 1.0 point would suggest that conditions were returning to normal. Investors were also watching a meeting in Brussels of leaders of the 27 European Union countries, who were meeting Wednesday to decide the details of the big bank rescues announced Sunday and Monday. Gordon Brown, the British prime minister, has called for the overhaul of the global financial system and the creation of “a new Bretton Woods,” the agreement that established the financial institutions of the post-World War II era. Espen Furnes, a fund manager at Storebrand Asset Management in Oslo, said that there was concern about European economies softening. But despite the weak showing Wednesday, the market mood remained fundamentally one of relief, as “people are hopeful that the bailouts are going to make a big difference,” Mr. Furnes said. “I wouldn’t read too much into the numbers today,” he added. “The declines are partly in reaction to investors selling after a couple of really good days.” Just before midday in Europe, the DJ Euro Stoxx 50, a barometer of euro zone blue chips, was down 3.3 percent, the CAC-40 in Paris fell 3.2 percent, and the DAX in Frankfurt lost 3.5 percent. The FTSE 100 index in London was down 4percent after Britain’s Office for National Statistics said Wednesday that the unemployment rate rose to 5.7 percent in the three months through the end of August from 5.2 percent in the previous quarter. The agency said the addition of 164,000 people to ranks of the jobless in the latest quarter was the biggest increase in 17 years. Tokyo shares, which soared 14.1 percent Tuesday, recovered from morning losses to close 1.1 percent higher. In Hong Kong, the Hang Seng index fell 5 percent. Trading in futures suggested the Standard & Poor’s 500 index would fall about 1.5 percent at the opening Wednesday in New York. The weak showing in equity markets followed a disappointing performance Tuesday on Wall Street, when the Dow Jones industrial average was unable to sustain early gains and ended the day down 0.8 percent. Asian countries on Wednesday announced new measures to grapple with fallout from the crisis. Gloria Macapagal Arroyo, the Philippine president, said Asian policy makers had agreed to create a fund to help any countries suffering liquidity problems, with the World Bank committing $10 billion, The Associated Press reported. The agreement was reached in Washington after a meeting of finance officials from the 10-member Association of Southeast Asian Nations and their partners from Japan, China and South Korea and representatives of international lending institutions. After a host of European data Tuesday suggesting that the region was headed into a recession, Japan announced Wednesday that its current-account surplus shrank 52.5 percent from a year earlier, more than economists had expected. More alarming, exports during the month edged up only 0.9 percent, while imports soared 20.2 percent from a year earlier, mostly because of higher oil prices. Japan has suffered from weak domestic demand for a decade, and sales overseas have been a key support to the country’s economic growth. The dollar was mixed as the yen rose against other major currencies. The euro fell to $1.3604 from $1.3620 late Tuesday in New York and fell to 137.94 yen from 139.03. The British pound rose to $1.7485 from $1.7397. The dollar fell to 101.09 yen from 102.07 and rose to 1.1375 Swiss francs from 1.1373. U.S. crude oil for November delivery fell 23 cents to $78.40 a barrel.

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