Breaking Wall Street Market News & Reports

The Dow closed down 142 points, or 1.3%, to 11,036, after dropping as many as 186 points early in the session. The S&P fell 17 points, or 1.4%, to 1,181

U.S. stocks were pummeled today, with the DJIA briefly falling below 11,000, in the wake of North Korea’s apparent shelling of a South Korean island. The American slump followed the reaction of markets around the world to the Korean news. Three more worries weighed on stocks: whether Europe could contain the Irish debt crisis, a weak report on existing-home sales and a cut in the Federal Reserve’s economic outlook.

Today’s was the eighth loss in 12 days for the Dow and S&P 500 and sixth in 12 sessions for the Nasdaq. That’s left some traders worried that the market may have peaked for 2010. The Dow finished the day down nearly 4% from its 2010 closing high of 11,444, reached on Nov. 5. It’s still up 5.8% for the year. The S&P is off 3.7% from its high close on the year, 1,226, also set on Nov. 5.

Federal Reserve officials approved a $600 billion plan to stimulate the economy, despite wide disagreement on whether the plan promoted by Chairman Ben Bernanke would work.

Nonetheless, all but ne member of the Federal Open Market Committee, the Fed’s rate-making body, voted to go ahead with the plan, according to minutes of the FOMC’s Nov. 2-3 meeting.

The concerns over the plan, which involves buying Treasury securities to drive interest rates lower, included:

The bond purchases won’t address the factors keeping unemployment high, including whether laid-off workers had the skills needed for today’s economy and could even relocate.

The plan could drive the dollar down to unacceptable levels.

The plan could boost inflation pressures.

The FOMC also trimmed its economic outlook for 2011 and beyond. It sees the U.S. unemployment rate ranging between 8.9% to 9.1% in 2011. A June outlook suggested the range would be 8.3% to 8.7%.

Existing-home sales fell; consumers help the economy
Stocks weren’t helped by a weak report on existing-home sales. The National Association of Realtors said sales fell 2.2% in October from September to an annualized 4.43-million-unit rate from 4.53 million in September. Sales were off 25.9% from October 2009′s 5.98-million-unit rate, when sales were surging prior to the initial deadline for the first-time homebuyer tax credit. Year-to-date, there have been 4.15 million existing-home sales, down 2.9% from 4.272 million units at this time in 2009, the Realtors said. The U.S. economy grew more than previously calculated in the third quarter, led by stronger consumer spending and fueled by labor income gains that may stoke demand into 2011. The revised 2.5% increase in gross domestic product compares with a 2% estimate issued last month and a 1.7% rise in the second quarter, the Commerce Department said today. Consumer purchases rose at the fastest pace since the last three months of 2006.

Is there a reason for the Korean shootout?
If you assume North Korea started the shooting that killed two people on South Korea’s Yeonpyeong Island, the question is why? A short answer from Mike Chinoy, a former CNN correspondent in Asia, is that the North Koreans want the rest of the world to know they can make bad stuff happen and there’s a risk to ignoring them or trying to punish them. South Korean President Lee Myung-bak  has been pursuing a get-tough policy, which the North Koreans resent, and clashes have erupted with some regularity in the last few years, says Chinoy, now a senior fellow at the U.S. China Institute at the University of Southern California.

What the North Koreans really want is to talk to the United States on a regular basis. Some analysts linked it to the need for food aid, which has been largely denied by South Korea and strangled by international and U.S. sanctions, The New York Times said. Adding to the North’s internal political realities, the ailing leader, Kim Jong-il, has been positioning his youngest son as his successor. The incident came after an American nuclear scientist who visited North Korea earlier this month said he had been shown a vast new facility built secretly and rapidly to enrich uranium.