The Johannesburg Top-40 index of blue-chip stocks fell 7.54 percent to 18,584.01 points, erasing two days of robust gains to hit its lowest closing level since June 2006. The All-share index fell 6.99 percent to 20,571.87 points.
In New York Stocks slid on Wednesday as investors worried that efforts to ease the credit crisis would not avert a recession, overshadowing solid profits from Coca-Cola Co and Intel Corp.
Investors’ mood soured when a government report showed that sales at U.S. retailers last month slid by the biggest monthly drop in more than three years. Consumer spending accounts for two-thirds of U.S. economic activity.
Investors sold shares of economic bellwethers, including Caterpillar Inc , which fell 8 percent. Energy companies were another casualty as oil prices slid. Chevron fell more than 6 percent.
U.S. crude for November delivery fell about 4 percent to $75.61 a barrel on the view that a recession would hurt energy demand.
"I think people are realizing there are interesting tools being put in place to deal with the credit crisis, but there’s going to be a lag time to get them to work," said Arthur Hogan, chief market analyst at Jefferies & Co in Boston.
The Dow Jones industrial average slid 347.03 points, or 3.73 percent, to 8,963.96. The Standard & Poor’s 500 Index tumbled 43.99 points, or 4.41 percent, to 954.02. The Nasdaq Composite Index dropped 53.96 points, or 3.03 percent, to 1,725.05.
Coca-Cola, the world’s largest soft-drinks maker, posted a third-quarter profit above Wall Street’s forecasts, sending shares 6 percent higher to $46.36.
Intel Corp’s shares rose 2.5 percent to $16.33. The chip maker posted a stronger-than-expected quarterly profit late on Tuesday.
But investors fear the credit crisis has already done enough damage to the economy, making it unlikely that policy measures to unfreeze lending would prevent a recession.
Financial shares fell after an influential bank analyst at Oppenheimer & Co, said U.S. banks were not out of the woods despite the government’s plan to stabilize key players by investing $250 billion.
Goldman Sachs fell 3.4 percent to $118.88, while Bank of America shares declined 3.2 percent to $25.70.
Shares of State Street Corp , one of the world’s biggest institutional asset managers, tumbled more than 10 percent to $50.75. The company said it moved forward the release of its results and received some of the $250 billion the U.S. Treasury is investing.
Bucking the trend, JPMorgan Chase rose 1.4 percent to $41.46. The bank said quarterly profit fell 84 percent due to mark-downs on underperforming loans, but its adjusted loss beat Wall Street’s estimates.
Caterpillar shares fell to $43.75 on the New York Stock Exchange. Chevron declined to $62.57.
Among retailers, Wal-Mart fell 3.5 percent to $52.56, while Target Corp slid 5.2 percent to $37.71. On Nasdaq, Qualcomm , a supplier of chips for cell phones and other technologies, were down nearly 4 percent at $38.78.