The markets ended another turbulent day on a down note as early optimism evaporated on worries related to the economic crisis and its impact on major companies like General Motors and Goldman Sachs.

Today’s Market

The Dow Jones Industrial Average lost 73.27 points, or 0.82%, to 8870.54, the broader S&P 500 lost 11.78 points, or 1.27%, to 919.21 and the Nasdaq Composite fell 30.66 points, or 1.86%, to 1616.74. The consumer-friendly FOX 50 ended down 7.68 points, or 1.08%, to 701.19.

Fueled by news of a $580 billion economic stimulus package in China, the Dow soared more than 200 points at Monday's opening bell. That bullishness was fleeting, though, as the markets slowly sank throughout the day, ending solidly in the red.

The day-long slide came without a specific catalyst, though investors clearly remain worried about a U.S. recession and its effect on corporate earnings. 

“I think everybody is trying to figure out what the magnitude of the recession is going to be. As they do that, they start to take a little bit of profits," said Anthony Conroy, head trader at BNY ConvergEx. 

In addition to the news out of China, the markets were also reacting to a series of other developments, including tumbling shares of financial giants like Goldman Sachs (GS), another bailout for AIG (AIG), new liquidity fears threatening General Motors (GM) and Circuit City's (CC) bankruptcy. 

Additionally, crude oil futures briefly tumbled below $60 a barrel, another sign of how the weakening economy is influencing the markets. 

GM was easily the biggest drag on the Dow, losing roughly one-quarter of its market value on fears it is running out of money. Disney (DIS) and Citigroup (C) also ended solidly in the red. On the other hand, aluminum maker Alcoa (AA) and AT&T (T) led the Dow's percentage winners. 

The Nasdaq Composite performed weaker than the broader market, weighed down by Google (GOOG), which fell sharply after Barclays cut its price target. Other tech stocks like Apple (AAPL) and SanDisk (SNDK) also tumbled.

The markets were clearly spooked after financial giants like Morgan Stanley (MS) and Merrill Lynch (MER) took another plunge on Monday. Leading the way down was Goldman Sachs (GS), the bank thought to be the most protected from the credit crisis.

Goldman tumbled to 5-1/2-year low on fears it may post its first quarterly loss since it went public in 1999. Those worries were bolstered by a new forecast from Barclays predicting Goldman will lose $2.50 per share in the current quarter, reversing its earlier call for a $2.71 profit, according to Dow Jones Newswires.

Fears about the financials were also stoked by Oppenheimer's Meredith Whitney, who predicted on Monday that Goldman and Morgan will have painful transitions to bank holding companies from investment banks.

The markets weren't helped by concerns that General Motors (GM) is quickly running out of cash. Days after GM warned it may not have enough money to survive the first half of 2009, analysts at Deutsche Bank warned the auto giant may not be able to fund operations beyond December, according to Dow Jones Newswires. 

GM, Ford (F) and Chrysler LLC have lobbied the government for emergency loans to prevent bankruptcies that could cause widespread job losses. Deutsche Bank also reportedly slashed its rating on GM to "sell" and cut its price target to zero.

In other bailout news, the Federal Reserve upped its bailout of American International Group (AIG) by $27 billion to $150 billion as it becomes clear the government's initial rescue failed to stop the bleeding. The Fed also cut the amount of interest on its emergency loans to AIG, extended the lending terms and took on more toxic debt to help the company survive. 

The new deal was announced on the same day AIG, a former component of the Dow, reported a stunning loss of $9.05 a share, or nearly $24.5 billion. AIG was given an emergency $85 billion loan in September by the government to prevent a bankruptcy filing that officials said would have caused a financial catastrophe.

Crude Touches $60 Before Recovering

Crude oil futures mirrored the back-and-forth action in the equities markets, swinging in a $6 trading range before ending in the middle. Oil ended at $62.41 a barrel, up $1.37 on the day but off by more than $3 from the day's highs. 

The turbulence in oil prices comes after crude plummeted $6.77, or 9.98%, last week. Oil prices are off by 57% from all-time highs set in July. 

U.S. Markets Not Stimulated by China

Unlike global stock markets, Wall Street wasn't given a lasting boost by news of a massive Chinese stimulus package, reported by government media agency Xinhua. 

The Chinese stimulus package will likely keep pressure on U.S. lawmakers to enact an aggressive second stimulus package, something President Bush has been reluctant to do but that Democratic Congressional leaders and President-elect Obama support.

Corporate Movers

Fannie Mae (FNM), the largest provider of U.S. residential mortgages, reported a third-quarter loss of $29 billion, or $13 a share. A year ago Fannie, which was nationalized in September, lost $1.4 billion, or $1.56 per share. 

Citigroup (C) is in talks to purchase an unnamed regional U.S. bank that overlaps geographically with its retail-banking unit, The Wall Street Journal reported. 

Circuit City (CC), the nation's second-largest electronics retailer, filed for Chapter 11 bankruptcy protection Monday morning. 

McDonald's (MCD) reported a 5.3% rise in U.S. same-store sales and an 8.2% increase in global same-store sales, sending its shares sharply higher. 

Tyson Foods (TSN) fell sharply even after posting a 50% jump in quarterly earnings on a 9.5% increase in revenue. The meat giant warned credit conditions have hurt exports.

HSBC (HBC), Europe’s largest bank, reported a rise in third-quarter profits even as its charge for bad U.S. loans jumped by $700 million to $4.3 billion.

Banco Santander (STD), the euro zone’s largest bank, unveiled a surprise plan to raise $9.2 billion in capital through a rights issue. The bank had originally planned to raise cash by selling its stake in an oil refiner.

NRG Energy (NRG) rejected Exelon’s (EXC) $6.2 billion buyout offer, saying it “manifestly undervalues” NRG. Execs at NRG also cast doubt Exelon would be able to finance such a deal.

Dell (DELL) decided not to launch its ambitious digital music player before the holiday shopping season, The Wall Street Journal reported.

Bunge (BG) terminated its deal to merge with Corn Products International (CPO) days after Corn Products backed out of the all-stock transaction. Corn Products is obligated to pay Bunge up to $10 million under terms of the deal.

Deutsche Post, the German mail and logistics company, announced plans to slash 9,500 jobs and shut down all of its DHL express service centers in the U.S. The layoffs come on top of 4,500 cuts already announced by the company.

World Markets

Global stock markets were up across the board, though European indexes closed well off session highs. 

The Dow Jones Euro Stoxx 50 ended up 23.30 points, or 0.90%, to 2625.84 and London's FTSE 100 Index jumped 38.96 points, or 0.89%, to 4403.92. 

In Asia, Japan's Nikkei 225 soared 498.43 points, or 5.81%, to 9081.43, while Hong Kong's Hang Seng Index soared 501.20 points, or 3.52%, to 14744.63.