Small caps plunge

The Russell 2000 (NYSE: IWM) and the other U.S. indices are falling hard on news of poor corporate earnings and mixed economic reports.

At 10:29 a.m. ET, the small-cap index had lost 20.94 points, or 2.53%, to 807.08. The Dow Jones Industrial Average (INDU) was down 224.36 points, or 1.61%, to 13,705.65.

Stocks suffered a steep drop out of the gate following news that Exxon Mobil Corp. (NYSE: XOM) reported a bigger-than-expected drop in third-quarter profit and missed Wall Street’s expectations.

The world’s largest publicly traded oil company announced a net income of $1.70 per share, down from $1.77 per share a year earlier and below analysts’ projected earnings of $1.75 per share.

Contributing to the overwhelmingly bearish sentiment was news that Citigroup Inc. (NYSE: C) was downgraded to “sector underperform” from “sector perform” by investment bank CIBC World Markets. CIBC said that Citigroup might have to cut its dividend or sell assets in order to raise more than $30 billion to shore up its capital.

In economic news, the U.S. Commerce Department reported that personal income increased at a seasonally adjusted rate of 0.4% in September, compared with a rise of 0.3% in August. That’s in line with economists’ expectations.

However, personal consumption in September increased 0.3%, below the projected rise of 0.4%. In August, personal consumption added a downwardly revised 0.5%.

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