By Lynn Thomasson Nov. 6 (Bloomberg) -- U.S. stocks fell for a second day after Cisco Systems Inc. forecast the first revenue decline in five years and News Corp. cut its profit outlook, deepening concern the economic slowdown is hurting earnings. Cisco, the world’s largest maker of networking equipment, lost as much as 4 percent. News Corp. sank 12 percent after the media company controlled by Rupert Murdoch cited shrinking ad sales. Retailers and automakers declined 1.3 percent as a group after unemployment claims climbed to the highest in 25 years. “The economic picture looks to be worsening,” said Nick Skiming, who helps oversee about $2 billion at Ashburton Ltd. in Jersey, Channel Islands. Companies are “confirming that. The broader slowdown that we have all been worried about is spreading across different sectors.” The Standard & Poor’s 500 Index dropped 15.71 points, or 1.7 percent, to 937.06 as of 10:01 a.m. in New York. The Dow Jones Industrial Average retreated 113.42, or 1.2 percent, to 9,025.85. The Nasdaq Composite Index lost 34.54, or 2.1 percent, to 1,647.1. Stocks extended yesterday’s 5.3 percent decline in the S&P 500 as Tyco Electronics Ltd., the biggest maker of electronic connectors, also said earnings fell and Citigroup Inc. stripped Amazon.com Inc. of its buy rating on concern about consumer spending. Computer stocks in the S&P 500 are down 39 percent in 2008, while banks lost 49 percent and retailers tumbled 31 percent, their biggest annual declines on record. Yearly Drop The S&P 500, which rebounded as much as 18 percent from a year low on Oct. 27, is still down 35 percent this year, the steepest annual retreat since 1937. Europe’s Dow Jones Stoxx 600 declined 3.1 percent today, while MSCI’s Asia Pacific index retreated 5.9 percent. Stocks slid even after the Bank of England unexpectedly cut its benchmark interest rate by 1.5 percentage points to 3 percent, trying to contain the damage caused by a recession. Switzerland’s central bank and the European Central Bank reduced their main lending rates by 50 basis points. About 481,000 workers filed initial claims last week, the Labor Department said today in Washington, exceeding the 477,000 projected by economists surveyed by Bloomberg News. The number of people staying on benefit rolls was the most since February 1983. A report tomorrow will probably show U.S. employers eliminated jobs in October for a 10th consecutive month. Earnings at companies in the S&P 500 that have reported third-quarter results fell 7.2 percent on average, Bloomberg data show. Analysts expect full-year profits to drop 7.7 percent, according to estimates complied by Bloomberg. Cisco Falls Cisco declined 49 cents to $16.90 after earlier dipping as low as $16.67. Chief Executive Officer John Chambers said sales will drop as much as 10 percent in the second quarter because of the financial crisis. In August, Chambers predicted an advance of 8.5 percent from a year earlier. Apple Inc. slipped 2.3 percent to $100.94. International Business Machines Corp. fell 1.8 percent to $87.80. Hewlett- Packard Co. retreated 4.4 percent to $34.67. News Corp.’s Class A shares tumbled $1.82 to $8.11. Fiscal 2009 profit will drop in the “low to mid teens” in percentage terms, the company said after previously forecasting a gain of 4 percent to 6 percent. Tyco Electronics Ltd., the world’s biggest maker of electronic connectors, tumbled $2.80, or 15 percent, to $16.21. Fiscal fourth-quarter profit fell 55 percent on restructuring costs and the company forecast a “significant” drop in sales and earnings this period. Amazon, Wells Fargo Amazon.com slid $2.83, or 5.4 percent, to $49.15. The largest Internet retailer was cut to “hold” from “buy” at Citigroup Inc., which noted the shares’ surge of as much as 36 percent since third-quarter results and “heightened macro concerns” including slower consumer spending. Wells Fargo & Co. declined 3.4 percent to $30.61 after the biggest bank on the U.S. West Coast said it plans to sell stock to fund the purchase of Wachovia Corp. The bank also said losses from the acquisition will be less than previously expected. The bank, which disclosed the share offering yesterday in a statement, had said it would raise as much as $20 billion to fund the deal. That was before the Treasury said it was buying $25 billion of Wells Fargo’s preferred shares. Analysts are lowering fourth quarter and 2009 profit forecasts for U.S. companies as third-period results miss projections at the highest rate in almost 11 years. Companies in the Standard & Poor’s 500 Index may see fourth- quarter earnings advance 15 percent, down from 42 percent projected at the end of August, according to a Bloomberg survey of analysts. Profits in 2009 may grow 13 percent, analysts say, compared with the 24 percent predicted two months ago. Yahoo! Gains Yahoo! Inc. jumped 2.5 percent to $14.27. Chief Executive Officer Jerry Yang, coping with the cancellation of an advertising agreement with Google Inc., said at a conference in San Francisco that he’s open-minded about forging other deals, Wal-Mart Stores Inc., the world’s largest retailer, increased $1.77 to $55.90. October sales climbed more than the company projected after consumers, battered by job losses and shrinking credit, bought discounted groceries and Halloween costumes for $12.88. The London interbank offered rate, or Libor, for three-month loans in dollars dropped 12 basis points to 2.39 percent today, the lowest level since November 2004, according to the British Bankers’ Association. To contact the reporters on this story: Sarah Jones in London at sjones35@bloomberg.net; Lynn Thomasson in New York at lthomasson@bloomberg.net.

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