Target on Monday became the latest retailer to post dour results, citing lower sales at established stores as the reason for a 24% drop in profit. Lowe's, meanwhile, posted a smaller-than-expected decline in third-quarter profit but predicted that fourth-quarter earnings would fall short of analysts' forecasts.
Target fell 4.1%, while Lowe's gained 4.2%.
The reports followed a spate of disappointing earnings and forecasts from companies, including Macy's, Starbucks and Best Buy, that are feeling the effects of a severe pullback in consumer spending.
Investors fear that Americans' clampdown on personal spending -- which accounts for about two-thirds of economic activity in the U.S. -- will prolong a worsening economic slump.
The layoffs planned at Citigroup underscored the ongoing distress in the financial sector, which has claimed jobs on all corners of Wall Street.
On Sunday, Goldman Sachs Group said seven top executives, including Chief Executive Lloyd Blankfein, wouldn't get cash or stock bonuses for 2008. Citigroup's leaders may also go without bonuses.
An index of financial stocks tumbled 6%, more than any other broad industry group in the S&P 500. Citigroup fell 6.6%. Goldman sank 6.4%.
Yields on most government debt fell. The yield on the benchmark 10-year Treasury note dropped to 3.68% from 3.74%.
The dollar fell against most other major currencies. Gold prices declined.
Oil prices continued their long slide. Crude futures sank $2.11 to settle at $54.95 a barrel, a 22-month low, on the New York Mercantile Exchange.
Japan's Nikkei index rose 0.7% despite a report showing the country's economic output declining for a second straight quarter, signaling a recession.
Elsewhere, key indexes fell 2.4% in Britain, 3.2% in Germany, 3.3% in France and 0.1% in Hong Kong.
