Deflation fears grow, and Dow slips below 8,000

Chart shows the percent change in the Consumer Price Index from prior month, seasonally adjusted for the past 13 months;

A growing fear of economic deflation helped take the air out of the stock market Wednesday, and another white-knuckle final hour on Wall Street pushed the Dow Jones industrials under 8,000 to their lowest close since the financial meltdown began.

Dow falls below 8,000, S&P at 5-year low
Wall Street hit levels not seen since 2003 on Wednesday, with the Dow Jones industrial average plunging below the 8,000 mark amid a dour economic outlook from the Federal Reserve and worries over the fate of Detroit's three automakers.

Fed sharply lowers forecasts, hints of rate cut
The Federal Reserve on Wednesday sharply lowered its projections for economic activity this year and next, and signaled that additional interest rate reductions may be needed to help combat the worst financial crisis to jolt the country in more than a half-century.

Ballmer dismisses Yahoo buyout but open on search
Microsoft Corp. is no longer interested in buying all of Yahoo Inc., CEO Steve Ballmer said Wednesday, though he told shareholders that the company would still be "very open" to a collaboration on Internet search. His comments sent Yahoo shares diving by 19 percent.

Consumer prices drop record 1 percent in October
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US home construction sinks to new record low
Construction of new homes plunged last month to the lowest level on records going back nearly 50 years as U.S. builders slashed production while Wall Street nosedived.

Democrats seek to lower expectations for bailout
Top Senate Democrats suggested Wednesday that a bill to rescue Detroit's Big Three automakers was stalled and challenged the Bush administration to take steps to save the industry if congressional efforts falter. The White House quickly rebuffed the suggestion.

Ghosn says auto industry consolidation likely
Nissan Motor Co. and Renault SA Chief Executive Carlos Ghosn said Wednesday that he expects the current crisis in the auto industry will soon lead some carmakers to consolidate.

Oil falls; Americans cut driving by 90B miles
Oil slipped below $54 a barrel Wednesday as stock markets across the globe fell and yet another U.S. government report illustrated the disarray in the housing market.

BASF temporarily closing 80 plants
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