By Elizabeth Stanton Nov. 14 (Bloomberg) -- U.S. stocks fell, extending a second straight weekly loss, as a record drop in retail sales and weaker demand for mobile phones heightened concern the recession will deepen. Sears Holdings Corp., Office Depot Inc. and Chevron Corp. slid as much as 14 percent on government data showing sales at retailers declined 2.8 percent last month and filling-station purchases slid 13 percent. Qualcomm Inc., the biggest maker of mobile-phone chips, and Motorola Inc. lost more than 5 percent after Nokia Oyj predicted global shipments will shrink next year. The Standard & Poor's 500 Index erased almost half of yesterday's 6.9 percent rally and extended its weekly tumble to more than 5 percent. ``The retailers are just confirming what everybody already knows; the economy is in bad shape, people are not spending,'' said Malcolm Polley, president of Stewart Capital Advisors in Indiana, Pennsylvania, which manages $1 billion. ``We have too many retailers and some of them will go away.'' The S&P 500 lost 33.37 points, or 3.7 percent, to 877.92 at 11:48 a.m. in New York as all 10 main industry groups retreated. The Dow Jones Industrial Average decreased 282.91, or 3.2 percent, to 8,552.34. The Nasdaq Composite Index slipped 4.1 percent to 1,530.58. Fourteen stocks fell for each that rose on the New York Stock Exchange. '08 Slump The S&P 500 has slumped nearly 40 percent in 2008 as credit-related losses and writedowns at banks, brokerages and insurers worldwide topped $950 billion in the worst financial crisis since the Great Depression. Federal Reserve Chairman Ben S. Bernanke, speaking at a panel discussion hosted by the European Central Bank in Frankfurt, said policymakers ``stand ready'' to take additional actions to help the economy. The Fed and ECB last month led central banks in the broadest coordinated interest-rate cut in history. The S&P 500 jumped the most in two weeks yesterday, including a 6 percent rally in the final hour of trading, as investors snapped up the cheapest energy shares on record and real-estate companies gained after CB Richard Ellis Inc. raised cash in a share sale. ``You cannot read anything significant into that,'' said London-based Justin Urquhart Stewart, director of 7 Investment Management. ``It just shows the level of nervousness and that is going to continue for some time. The background noise is going to be very poor indeed,'' he told Bloomberg Television. Sears, the largest U.S. department-store chain, tumbled 11 percent to $39.65, a four-year low. Office Depot, the second- biggest office-supplies retailer, slid 14 percent to $2.09. Chevron, the second-biggest U.S. oil company, slumped 4.2 percent to $72.02 as crude declined 3.5 percent. `Halt in October' The 2.8 percent decrease in retail sales was the fourth consecutive drop and the biggest since records began in 1992, the Commerce Department said. Purchases excluding automobiles also posted their worst performance. ``It reminds everyone how difficult the current environment is,'' Mark Freeman, a money manager at Westwood Management Corp. in Dallas, which oversees $7 billion, said of the data and lowered forecasts from some chain stores. ``Everyone should expect volatility to continue.'' Qualcomm slid 5.4 percent to $32.93, while Motorola lost 8.3 percent to $4.20. Nokia, the world's largest maker of mobile phones, said industrywide handset sales will be lower this year than previously anticipated, forcing the company to deepen cost cuts. Global shipments will be about 1.24 billion this year, down from a previous prediction of 1.26 billion phones, and will shrink next year, Nokia said in a statement today. Semis Slump Semiconductor companies in the S&P 500 tumbled 7 percent, the biggest drop among the index's 24 industry groups. Intel Corp., the largest chipmaker, fell 7.1 percent to $13.41, a six- year low, for the biggest drop in the Dow average. Earnings at companies in the S&P 500 that have reported third-quarter results dropped 17 percent on average, according to Bloomberg data. Companies from Best Buy Co. to Intel Corp. have cut forecasts this week. Analysts expect an 8.5 percent decline in full-year profits, estimates compiled by Bloomberg show. JPMorgan Chase & Co. led declines in financial companies, falling 5.8 percent to $35.04. Freddie Mac, the government- sponsored mortgage-finance company seized by the U.S. two months ago, said in a regulatory filing it may prevent JPMorgan from retaining the servicing contracts of Washington Mutual Inc., whose assets and branches it acquired in September. Freddie Mac, which along with larger competitor Fannie Mae was removed from the S&P 500 in September after the companies lost more than 97 percent of their market value, today asked the Treasury Department for $13.8 billion after a record quarterly loss caused its net worth to fall below zero. Freddie Mac fell 16 percent to 61 cents Citigroup Inc., the fourth-biggest U.S. bank by market value, fell 4.1 percent to $9.06, erasing an earlier gain of as much as 7 percent. Chief Executive Officer Vikram Pandit and three deputies bought a combined 1.3 million Citigroup shares at a 12-year low yesterday. To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net.

Source