rate profits. 

Concern about the U.S. labor market and the broader economy were compounded by news showing that sluggish growth was also emerging abroad. Euro zone economic data point to a weakening in growth at midyear, ECB President Jean-Claude Trichet said.

Shares of Caterpillar, the maker of bulldozers and excavators, and a major exporter, fell to $64.01 on the New York Stock Exchange, while Boeing shares dropped to $63.34.

Shares of technology companies, seen most vulnerable due to extensive global exposure, fell.

Shares of networking equipment maker Cisco Systems (CSCO.O) were a top drag on the S&P 500, with a drop of 4 percent at $22.38 on Nasdaq.

BlackBerry devices maker Research In Motion (RIM.TO) (RIMM.O) was the top Nasdaq drag, falling more than 3 percent to $11.08. Shares of iPod and iPhone maker Apple (AAPL.O) dropped 1 percent to $165.24.

The bleak economic news overshadowed a solid August sales report from Wal-Mart Stores (WMT.N), the world’s largest retailer, whose stock rose 0.8 percent to $60.24.

Labor market jitters were sparked by a weekly government report showing an unexpected jump in the number of filings for jobless benefits and by a report by ADP Employer Services showing U.S. private employers slashed 33,000 jobs in August.

Top drags included shares of economic bellwethers such as Caterpillar Inc (CAT.N), down more than 5 percent, and Boeing (BA.N), whose stock slid more than 4 percent after the plane maker’s largest labor union said its members had rejected the company’s contract offer and voted to strike.

“The job market has been just a slow drip of bad news,” said John Augustine, chief investment strategist at Fifth Third Asset Management in Cincinnati, Ohio.

“That’s better than an open faucet, but it’s still bad news for the economy. The stock market is struggling because it’s waiting for better labor market news.”

The Dow Jones industrial average (.DJI) slid 232.94 points, or 2.02 percent, to 11,299.94. The Standard & Poor’s 500 Index (.SPX) dropped 21.35 points, or 1.67 percent, to 1,253.63. The Nasdaq Composite Index (.IXIC) declined 41.59 points, or 1.78 percent, to 2,292.14.

A lower close will mark the fourth day of losses for both the Nasdaq and the S&P 500.

The economic data was all the more unnerving for investors as it came just a day before the all-important release of the government’s August non-farm payrolls report.

Stocks tumbled on Thursday, weighed down by signs of deterioration in the labor market and concern over the outlook for corporate profits.

Labor market jitters were sparked by a weekly government report showing an unexpected jump in the number of filings for jobless benefits and by a report by ADP Employer Services showing U.S. private employers slashed 33,000 jobs in August.

Top drags included shares of economic bellwethers such as Caterpillar Inc (CAT.N), down more than 5 percent, and Boeing (BA.N), whose stock slid more than 4 percent after the plane maker’s largest labor union said its members had rejected the company’s contract offer and voted to strike.

“The job market has been just a slow drip of bad news,” said John Augustine, chief investment strategist at Fifth Third Asset Management in Cincinnati, Ohio.

“That’s better than an open faucet, but it’s still bad news for the economy. The stock market is struggling because it’s waiting for better labor market news.”

The Dow Jones industrial average (.DJI) slid 232.94 points, or 2.02 percent, to 11,299.94. The Standard & Poor’s 500 Index (.SPX) dropped 21.35 points, or 1.67 percent, to 1,253.63. The Nasdaq Composite Index (.IXIC) declined 41.59 points, or 1.78 percent, to 2,292.14.

A lower close will mark the fourth day of losses for both the Nasdaq and the S&P 500.

The economic data was all the more unnerving for investors as it came just a day before the all-important release of the government’s August non-farm payrolls report.

Concern about the U.S. labor market and the broader economy were compounded by news showing that sluggish growth was also emerging abroad. Euro zone economic data point to a weakening in growth at midyear, ECB President Jean-Claude Trichet said.

Shares of Caterpillar, the maker of bulldozers and excavators, and a major exporter, fell to $64.01 on the New York Stock Exchange, while Boeing shares dropped to $63.34.

Shares of technology companies, seen most vulnerable due to extensive global exposure, fell. Shares of networking equipment maker Cisco Systems (CSCO.O) were a top drag on the S&P 500, with a drop of 4 percent at $22.38 on Nasdaq.

BlackBerry devices maker Research In Motion (RIM.TO) (RIMM.O) was the top Nasdaq drag, falling more than 3 percent to $11.08. Shares of iPod and iPhone maker Apple (AAPL.O) dropped 1 percent to $165.24.

The bleak economic news overshadowed a solid August sales report from Wal-Mart Stores (WMT.N), the world’s largest retailer, whose stock rose 0.8 percent to $60.24.

Energy shares slid along with plunging oil prices, sending Exxon Mobil (XOM.N) down 4.3 percent to $71.41. U.S. front-month crude dropped 6.7 percent, or $2.54, to $34.98 a barrel amid concern the deepening recession will sap energy demand.

Among big manufacturers, shares of 3M Co (MMM.N) fell almost 4 percent to $47.55, while Caterpillar Inc (CAT.N) shed 5.1 percent to $29.36. On Nasdaq, shares of iPod and iPhone maker Apple Inc (AAPL.O) were a top drag, down 3.5 percent at $95.78. The semiconductor index (.SOXX) fell 5 percent.

Wal-Mart (WMT.N) was the only stock higher in the 30-component Dow industrial average after the retailer posted a quarterly profit that beat Wall Street’s forecasts. It was up 3.3 percent at $48.07.

U.S. President Barack Obama is due to sign a $787 billion economic stimulus bill into law on Tuesday, but investors are fearful that the measure would not help soften the impact of the 14-month-old recession soon enough. The White House hopes the package will save or create 3.5 million jobs

The slide took the benchmark S&P 500 below the 800 level for the first time since the bear market low of November 21, weighed by financials, energy companies and big manufacturers.

Shares of Bank of America (BAC.N) fell 10.2 percent to $5 on the New York Stock Exchange, as shares of JPMorgan (JPM.N) lost nearly 9 percent to $22.53. Wells Fargo (WFC.N) dropped more than 7 percent to $14.54, as the KBW Banks index (.BKX) tumbled 7.2 percent.

“There’s still trouble in the banking sector, trouble with respect to corporate earnings and nothing that we’ve seen is going to reverse that in the short term,” said Dan Greenhous, market analyst at Miller Tabak & Co in New York.

“I don’t believe equities are appropriately priced for weakness through the entirety of 2009.”

The Dow Jones industrial average (.DJI) slid 263.95 points, or 3.36 percent, to 7,586.46. The Standard & Poor’s 500 Index (.SPX) dropped 32.62 points, or 3.95 percent, to 794.22. The Nasdaq Composite Index (.IXIC) tumbled 53.90 points, or 3.51 percent, to 1,480.46.

Before the market’s open, a report showing that manufacturing production in New York state fell to a record low in February added to worries about the deepening recession among investors already fearful that a new U.S. economic stimulus package won’t be a quick fix.

In Japan data showed on Monday that the world’s second biggest economy sank deeper into recession with its worst quarterly contraction since the oil crisis in the 1970s.

Unveiling the iPad, Apple chief executive Steve Jobs announced deals with five major publishers and an agreement that allows publishers to set higher prices while Apple settles for a 30-percent cut.

The so-called “agency model” is a departure from the way Amazon has been doing business with book publishers.

Since the release of the Kindle two years ago, Amazon has sold digital versions of hardcover new releases and bestsellers for 9.99 dollars, a move primarily aimed at driving sales of the online retail giant’s e-reader.

Publishers were generally opposed, believing the price too low, but were not in a position to argue while Amazon was the only game in town.

That is no longer the case and the revolt against Amazon was immediate.

Just days after the wraps were taken off the iPad, Macmillan informed Amazon it wanted to begin charging between 12.99 and 14.99 dollars for e-book versions of most hardcover new releases and bestsellers.

Macmillan said it would give Amazon a 30-percent cut, as with Apple.

Amazon protested, temporarily pulling Macmillan titles — both print and e-books — from its online bookstore, but acknowledged that “ultimately, however, we will have to capitulate and accept Macmillan’s terms.”

Another major publisher, Hachette Book Group, quickly followed Macmillan.

“It’s important to note that we are not looking to the agency model as a way to make more money on e-books,” Hachette chairman and chief executive David Young said in a letter to literary agents.

“In fact, we make less on each e-book sale under the new model,” he said. “We’re willing to accept lower return for e-book sales as we control the value of our product — books, and content in general.

“We’re taking the long view on e-book pricing, and this new model helps protect the long-term viability of the book marketplace,” Young said.

Gartner analyst Allen Weiner said it remains to be seen whether consumers, having gotten used to paying 9.99 dollars for a bestseller or a new release, will pay more.

“The precedent may have already been set,” Weiner said. “Consumers may not pay more than 12 dollars.”

“The damage that Amazon has done may be irreparable,” he said. “The cow is out of the barn. I don’t know how you get the cow back in the barn.”

At the same time though, “we’re in the process of having all distribution lines and pricing models redrawn,” Weiner said. “It’s Chapter One in all of this, but it may or may not dictate what happens at the end.”

A host of rivals to the market-dominating Kindle electronic reader has given newfound hope to publishers that they will finally be able to dictate their own terms after being at the mercy of Amazon.

Rupert Murdoch, whose News Corp. stable includes publisher Harper-Collins, could hardly contain his glee during an earnings call last week.

“Without content, the ever larger and flatter screens, the tablets, the e-readers and the increasingly sophisticated mobile phones would be lifeless,” Murdoch said. “Without content these ingenious and wonderful devices would be unloved and unsold.”

One new arrival in particular has Murdoch and other publishers excited — Apple’s iPad tablet computer, which doubles as a full-color e-reader of books, newspapers and magazines.

“We’re at a happy point, not just with Apple, but with Barnes & Noble and the ‘Nook,’ the 23 devices that have been launched, and Google Books seems to be just around the corner,” a source in the publishing industry said.

“Now we have that many more distribution outlets coming,” said the source, who requested anonymity out of fear of antagonizing Amazon, which may be facing competition but remains the undisputed e-book leader.

Although the iPad will not be available to consumers until the end of March, Apple is shaking up the digital book market like it did the music industry with the iPod and iTunes music store.

“You may have seen our Chrome OS tablet concepts from last Monday; in the video, some floating hands interact with a touch surface,” Google Chrome lead designer Glen Murphy wrote in a personal blog post.

“We only used one hand image instead of showing the full range of gestures, but I did make a larger set.”

The website focused on Chrome OS software and did not indicate whether Google would make its own tablet or opt to let others tend to the hardware.

Google’s mobile Android software is built into iPhone competitors, including the Internet firm’s own Nexus One smartphone released in January.

Pictures of what a Google tablet might look like were featured at a Chromium developers web page on Tuesday along with talk of how touchscreen controls could work based on the Internet titan’s Chrome computer operating system.

The images were posted online two days before the January 27 event at which Apple unveiled an iPad tablet computer that will begin shipping worldwide in March.

Google made images and video of Google tablet gesture control capabilities available online for developers to consider.

The “concept user interface under development” could signal another front on which Google will battle with Apple, which uses its own custom software in the iPad, iPhone, iPod, and Macintosh computers.

Apple shares fell $3.34, or 2 percent, to $166.19 on Tuesday.

Pacific Crest Securities analyst Andrew Hargreaves said the stock fall was likely due to bearish broad sentiment, rather than any disappointment related to the invitation. However, he expects any changes to the iPod to be incremental.

“I’m not expecting anything revolutionary,” he said.

Apple’s iPod line needs to be refreshed and the price of its iPod Touch models need to be cut because they have a higher starting price than its iPhone, which includes a mobile phone and other features not included in the device, said American Technology Research analyst Shaw Wu.

The Internet-ready iPod touch starts at $299 in the United States, compared with $199 for the iPhone.

“Pricing needs to be adjusted downward toward market conditions. We are in a tougher economy. That’s what makes most sense,” Wu said.

Analysts said they still expect Cupertino, California-based Apple to refresh its MacBook notebook PCs soon.

Both Wolf and Hargreaves expect new MacBooks to be announced in the coming weeks, if not on Tuesday.

In July, Apple Chief Executive Steve Jobs said in a statement the company was working on several new products to launch in the coming months, but executives declined to give details.

Apple Inc (AAPL.O) is expected to unveil new iPod music players — and possibly price cuts — at a media event next Tuesday but may not launch a long-awaited update to its MacBook laptop computers until a later date.

Apple, which also makes iPhone mobile devices, e-mailed reporters an invitation to a September 9 event entitled “Let’s Rock,” which has an image of a man jumping in the air while listening to an iPod, with the words “playing soon.”

No further details were available from the company, which often sends provocative invitations to events that end up being product launches. Creating an allure around its brand has only helped drive Apple’s market capitalization above Google Inc (GOOG.O), despite fears about the weak U.S. economy, which is slowing consumer purchases.

One new feature on all the new iPods, again except the shuffle, is called Genius. After users select a song, the feature creates aplaylist of like music found on their iPod and, on their computer, suggests related songs they could buy from iTunes.

The biggest change this year is with the mid-range nano. It returns to an elongated shape from last year’s square model derisively dubbed “fatboy,” and is available in new colors, according to the paper.

SanDisk’s line of Sansa players has long been runner-up to the iPod in market share. But the company has made only one notable update in recent months: introduction of the all-new Sansa Fuze which has a built-in FM tuner and a microSD card slot allowing users to add additional memory and to plug in albums.

Microsoft updated its lineup with higher capacity versions of both its flash-and hard-drive-based players, lowering its prices for older models and adding new colors.

Also, it’s updating software, adding new ways for users to find music.

As a newcomer to the MP3 player market, Slacker issued a quick update, replacing its boxy and bulky first generation Portable Radio Player with a smaller, sleeker device dubbed the G2 Personal Radio Player which is tied tightly to Slacker’s Internet radio service.

Most of the new players offer more storage space for songs, videos, pictures or games at a lower price, many have neat new features and some have radical design changes, according to the San Jose Mercury News.

As for Apple, the company has effectively cut the price on all of its iPod lines, except the low-end shuffle, by reducing the amount customers have to pay for storage.

“Since he never shows up in public without a new blockbuster product, he may be dodging the show because he has nothing to show there,” McIntyre wrote on 247wallst.com.

Apple also announced that the upcoming MacWorld would be the company’s final appearance at the trade show, which brings together Macintosh computer devotees, developers and innovators pitching Macintosh-related products.

Since the first Macworld was held in San Francisco in 1985, Jobs had used his keynotes to unveil world-captivating products such as the iPod.

Apple downplayed its decision to pull out of Macworld, saying that its popular real-world and online stores have made it easy to connect with fans without having to spend money on an expo.

In recent years Apple has stopped going to similar expos in New York, Tokyo and Paris.

Analysts said Apple’s practice of using the Macworld stage to announce innovative products put pressure on the company to have hip, new things to launch every January.

That is an unsustainable position for a company to be in given product development and production cycles, said analyst Rob Enderle of Enderle Group in Silicon Valley.

The surprise announcement late Tuesday by the maker of the iPod, iPhone and Macintosh computers sparked speculation that Jobs may be ailing or that Apple does not have any new products to present at the annual event in San Francisco.

Apple’s share price lost 6.57 percent in New York on Wednesday to close at 89.16 dollars.

Analyst Jud Pyle of Thestreet.com described the reaction as “classic speculation and fear.”

“Whenever a cancellation like this occurs, there is a negative reaction in the stock, regardless of the reason,” he wrote.

Another analyst, Douglas McIntyre, said Jobs, who has fought a bout against pancreatic cancer in the past, may simply have decided to skip MacwWorld because he has “nothing spectacular to debut.”

Papermaster’s former employer is challenging the move on the grounds Papermaster is contractually restricted from working for a competitor.

Apple announced on Tuesday that the employee credited with being the “father of the iPod” is stepping down from his post at the iconic California company.

Apple said iPod division vice president Tony Fadell and his wife, Danielle Lambert, who is vice president of the company’s human resources department, are “reducing their roles” to “devote more time to their young family.”

While the spotlight routinely shines on Apple’s notoriously involved chief executive Steve Jobs, Fadell is said to be the one behind the idea for iPod MP3 players that rocketed to global success and revived the company’s fortunes.

“Tony and Dani have each made important contributions to Apple over the past eight years,” Jobs said in a release.

“We’re sorry to see Dani go, and are looking forward to working with Tony in his new capacity.”

Lambert is to leave Apple at the end of the year and Fadell is to become an advisor to Jobs.

The joint venture between MySpace and major music labels such as Sony BMG Music, Universal Music Group and Warner Music Group lets people access a range of new music services, including streaming, music and ringtone downloads, videos, ticketing and merchandising.

McDonald’s, Sony Pictures, Toyota and State Farm are advertising sponsors of the site.

“We wanted to come up with a program that meets the needs of music companies and artists, by definition, and users,” DeWolfe said.

People streamed music more than 1 billion times in the first few days and have created 80 million playlists since the launch, DeWolfe said. Five million bands upload their music to the site.

Music companies have been keen on another major player to boost sales by driving competition to iTunes — Apple’s digital music store and the top U.S. music retailer — even as CD sales have fallen in recent years.

MYSPACE VS ITUNES

Warner Music Group Chief Executive Edgar Bronfman said MySpace was different from iTunes in its focus on “community and sharing.” People can share playlists, peruse their friends’ music choices and discover new songs that way, Bronfman said at the conference.

But DeWolfe said the “Genius” feature doesn’t make iTunes a competitor to MySpace Music because Apple continues to focus on selling their music devices.

“If anything, we’ll be accretive to iPod sales” as people use MySpace Music to download more music and videos for their iPods, DeWolfe said. “Unless we develop a device,” he added.

While remote at this point, it would be an audacious move for MySpace, which practically defined the burgeoning social network concept as a business.

MySpace, which News Corp bought for $580 million in 2005, has proven a particular bright spot for Murdoch’s international media conglomerate, even as the company faces a tough 2009 because of falling advertising revenue in other parts of its business.

The site faces increasing competition from networks such as the privately-held Facebook, as they all struggle to find new ways to make money from the millions of people who interact with each other through their online profiles.

the popular online social network owned by Rupert Murdoch’s News Corp, could develop a digital music player in the future, pitting it against Apple Inc’s hot-selling iPod.

But there are no immediate plans to make or sell such a device, MySpace co-founder and Chief Executive Chris DeWolfe said at a conference in San Francisco on Thursday.

“It’s possible” that MySpace, which recently launched a music joint venture with major music labels, could eventually build a device for listening to music, DeWolfe said in response to a question from conference host John Battelle.

“Right now, we’re just focusing on the service,” DeWolfe said at the Web 2.0 summit.

MySpace, the largest online social networking site, launched MySpace Music in September, aiming to become the ultimate one-stop for music fans.

The website focused on Chrome OS software and did not indicate whether Google would make its own tablet or opt to let others tend to the hardware.

Google’s mobile Android software is built into iPhone competitors, including the Internet firm’s own Nexus One smartphone released in January.

The images were posted online two days before the January 27 event at which Apple unveiled an iPad tablet computer that will begin shipping worldwide in March.

“You may have seen our Chrome OS tablet concepts from last Monday; in the video, some floating hands interact with a touch surface,” Google Chrome lead designer Glen Murphy wrote in a personal blog post.

As iPad commanded the technology world’s attention, Google continued working quietly on tablet computer software that could run rivals to Apple’s latest creation.

“We only used one hand image instead of showing the full range of gestures, but I did make a larger set.”

Google made images and video of Google tablet gesture control capabilities available online for developers to consider.

The “concept user interface under development” could signal another front on which Google will battle with Apple, which uses its own custom software in the iPad, iPhone, iPod, and Macintosh computers.