US stocks fell for a second day today as a string of disappointing results from companies such as Boeing and Merck, the US drugmaker, increased investors’ pessimism about the economic outlook.

The Dow Jones industrial index fell for a second day running, losing 514.5 points, or 5.69 per cent, to 8,519.21 in New York today.

The decline came after Merck reported a 28 per cent decline to $1.09 billion (£667,000 million) in its third-quarter profit as it announced plans to fire 7,200 people or 12 per cent of its workforce.

Boeing added to the disappointment by reporting a 38 per cent dive in its third-quarter profit to $695 million, as revenues fell by 7.4 per cent to $15.3 billion.

Wachovia reported a $23.9 billion third-quarter loss, the largest by a US financial services group since the credit crunch hit. Samsung Electronics scrapped a $5.85 billion offer to buy SanDisk, saying losses at the US company may worse as a glut forces chipmakers to cut prices.

The Nasdaq index was down 4.7 per cent, at 1,615.7. The broad S&P 500 was 6.10 per cent lower, at 896.83.

In London, UK stocks closed down188.84 points to 4,040.89 after Gordon Brown said that a recession in the UK is now likely, following last night's bleak warning from Mervyn King, Governor of the Bank of England.

The price of oil also fell by more than 5 per cent with Brent down $3.89 at $65.83, while US crude for December delivery touched a low of $67.50, its lowest since June 2007.

US government leaders signalled their continuing determination to combat the financial crisis this morning as the Administration announced a series of global summits to discuss the unfolding financial crisis and the financial system can be reformed to best prevent a repeat of recent months.

The first of these meetings will be held on November 15, in Washington.

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