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U.S. markets plunge quickly Thursday

NEW YORK, Nov. 20 (UPI) -- U.S. stock indexes dropped again Thursday morning, as the Dow Jones industrial average fell to lows unseen in more than five years.

Amid the downturn and the breach of the 8,000-point level in the DJIA, corporate and real estate bonds dropped to 20-year lows, The Wall Street Journal reported Thursday.

Financial firms with large bond investments took large hits Wednesday, with Citigroup Inc. shares falling close to 23 percent.

In midmorning trading Thursday, the Dow Jones industrial average was off 157.86 points to 7,839.42, down 2 percent. The Standard & Poor's 500 index dropped 2.39 percent to 787.29, falling 19.29 points. The Nasdaq index fell 1.49 percent, down 20.64 points to 1,365.78.

The 10-year U.S. Treasury bond rose, yielding 3.75 percent.

The euro rose to $1.2528, compared to $1.252 Wednesday. Against the Japanese yen, the dollar rose to 94.66 yen, from 95.90 yen.

In Tokyo, the Nikkei average lost 570.18 points to 7,703.04, off 6.8 percent.

Automakers say they can't fund development

LOS ANGELES, Nov. 20 (UPI) -- U.S. and foreign automakers have said development of fuel-efficient cars cannot proceed under the current economic environment.

Carlos Ghosn, chief executive officer of Nissan Motor Company of Japan and Renault said Wednesday that automakers "can't find the financing" for development of alternate-fueled cars and hybrids.

Ghosn made his remarks as the keynote speaker at the Los Angeles Auto Show, USA Today reported Thursday.

General Motors Corp., while claiming it is quickly running out of cash, has said it has delayed production of an advanced Saturn Vue, a gas-and-electric hybrid that was due to go on sale in December. It is now scheduled for a launch in 2009.

Delays in dealer training and new service equipment purchases "helps everybody right now," Saturn spokesman Steve Janisse told the newspaper.

Chrysler LLC said it doesn't have the funds to continue Aspen hybrid SUV production at its Delaware plant, which it will close at the end of the year.

Ghosn said the United States is guiding the direction for the industry.

"I think the United States is being taken as a kind of benchmark," he said in the USA Today article. "Financing for these kind of products is absolutely essential, and only states can do it."

DJIA at six-year low stirs new worries

NEW YORK, Nov. 20 (UPI) -- Data on housing and prices pushed the Dow Jones industrial average to a six-year low Wednesday, stirring alarm over where the U.S. economy is headed.

The recent housing and price data have considerable shock value. Housing starts in October fell to the lowest number since the figure was first tracked in 1959, while the headline inflation figure fell 1 percent, the largest one-month fall since 1947, The Washington Post reported Thursday.

The DJIA closed Wednesday at 7,997.28, a drop slightly greater than 5 percent. But, breaching the 8,000 barrier carries a psychological message.

"When you break through these kinds of levels, it strongly suggests there's more to go," Ed Yardeni, president of Yardeni Research told The New York Times.

The dropping consumer price index is a strong signal that consumers, who drive two-thirds of the economy, are putting on the brakes.

"It's not simply that (stores) don't have pricing power," said Joel Naroff, president of Naroff Economic Advisors. "It's that they can't sell what they have," he said.

"It's a tough environment, you've got layoffs, you've got bad news, people are worried about banks," said Andrew Brooks, head equity trader at T. Rowe Price. "It's a nervous, anxious market," he said.

Japan posts trade deficit in October

TOKYO, Nov. 20 (UPI) -- Japan's falling exports and rising imports together produced a trade deficit of $668.5 million, for October, the government said Thursday.

It was the first October in 28 years when the country, whose economy is the second largest in the world after the United States, saw its trade balance fall into the red, the Finance Ministry said. Japan already is in a recession.

Total October exports fell 7.7 percent to $72.46 billion, while October imports rose 7.4 percent to $73.13 billion.

Exports to Asia fell for the first time in seven years, while the yen's appreciation caused larger decreases in shipments to the United States and Europe compared to last year.

Japan's October exports to Asia fell 4 percent from the same month of last year to $35.5 billion, Kyodo news service reported.

Exports to the United States in October fell 27.5 percent to $5.43 billion. It was the 14th consecutive month of decline in exports to the United States.

Japan also experienced a big trade deficit in August.

Taro Saito, senior economist at NLI Research Institute, told Kyodo he expects the trade balance to come back into the black as crude oil prices are expected to fall further in the coming months.