Stocks Tumble on Consumer Fears

Here comes the pullback that everyone was waiting on. At least it appears that way based on the selloff that took place on Wall Street. Stocks and commodities suffered a broad-based decline as consumer woes and economic jitters came into play again. The Dow Jones Industrial Average lost 186.06 points to finish the day off at 9,135.34. Broader stock indicators also posted steep declines. The losses on stock exchanges extended the heavy selling that began Friday with a disappointing reading on consumer confidence . Weak sales data and poor earnings from major chains added more fuel to the fire. In other news, the Empire State Manufacturing survey, a measure of activity in the New York area, rose to 12.1 in August. Another round of economic data is expected this week. So far the hardest hit sectors have showed signs of improvement and investors are hoping this pattern continues. Treasury prices were higher as investors sought safety from the declining stock market. U.S. light crude oil for September delivery fell 91 cents to $66.60 a barrel on the New York Mercantile Exchange.

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Latest Buzz on the Street

Reader's Digest will finally meet the same fate as many other well-known companies. The American media icon of the 20th century announced plans to file for bankruptcy protection . Although the magazine still has the largest circulation in the United States, declining revenue and advertising sales have pushed the company to this decision.

Lowe's (LOW) once again reported some disappointing quarterly results. The No.2 home-improvement retailer said second-quarter earnings fell 19 percent on weaker-than-expected sales . Based on these results, some analysts are questioning if the housing slump has truly bottomed out? The company's main competitor, Home Depot (HD) is slated to report its 2Q earnings on Tuesday.

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Homebuilders' confidence in the US market for newly built homes rose to its highest levels in a year. The data is the latest in a series to suggest that the housing market may have found a bottom. Looks like home-improvement retailers may have to blame declining sales on something else.

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Over the weekend, real estate lender Colonial BancGroup Inc. was shut down by federal officials. The FDIC approved the sale of Colonial's $20 billion in deposits and about $22 billion of its assets to BB&T Corp. (BBT). Now the Winston-Salem, N.C., bank is looking to replenish its capital base following the sizable acquisition by selling $750 million of common stock.

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American Express (AXP), Bank of American (BAC), and Capital One (COF) reported some trends in their bad debts that mirrored the concerns with consumer spending that have caused the broad market to waiver.

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Rosetta Stone issued an outlook that was ugly in any language. The language-study software company reduced earnings guidance for the current quarter and full year. The company, which went public in April in one of the most successful IPOs this year, cited higher-than-expected operating expenses as the reason for the cut in outlook.

CIT Group Inc.'s (CIT) tender offer for its $1 billion floating-rate notes due Monday was successful, giving the lender a little more breathing room on its debt, though the 59.8 percent of notes that were tendered was below the level the company announced earlier this month.

Andrew Cuomo is on a roll! The New York Attorney General just announced a lawsuit against American Modification Agency, Inc. on Thursday and now he has launched another suit against Schwab (SCHW) over auction-rate securities.

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