Nov. 12 (Bloomberg) -- U.S. stocks and the dollar tumbled and oil plunged to a 21-month low after Best Buy Inc. warned of a ``seismic'' slump in spending and the Treasury shifted bailout money, spurring concern the credit crisis is far from over.

Best Buy, the largest electronics retailer, helped push the Standard & Poor's 500 Index to within half a percent of a five- year low. December crude dropped 5.3 percent to $56.16 on concern a recession will curb demand for energy. The dollar lost 2.4 percent against the yen, while Treasury bonds rallied.

The S&P 500 fell 5.2 percent to 852.3 and has lost 8.5 percent over the past three days, while the Dow Jones Industrial Average retreated 411.3 points, or 4.7 percent, to 8,282.66. American Express Co. tumbled 10 percent on a report the company may need government aid. The S&P 500 Financials Index slid to a 12-year low as the Treasury scrapped plans to buy mortgage assets and shifted focus to consumer credit.

December futures on the S&P 500 declined 1.1 percent as of 6:18 p.m. in New York. After the close of trading, Intel Corp., the world's biggest semiconductor maker, reduced its fourth- quarter sales forecast by $1 billion, citing ``significantly weaker'' demand. The stock lost 7 percent to $12.57 after ending regular trading at $13.52.

``If you're trying to be optimistic and look for the positive side, you keep getting slapped down,'' said James Dunigan, managing executive of investments at PNC Wealth Management in Philadelphia, which oversees $63 billion. ``We have a very uncertain economic and financial framework. Until you see some evidence of confidence returning, the path of least resistance for the market is down.''

Nasdaq Low

The Nasdaq Composite Index lost 5.2 percent to 1,499.21, a five-year low. The S&P 500 is down 46 percent from its October 2007 record.

Best Buy declined for a seventh day, losing $1.91 to $21.97. Profit for the year ending in February may be as low as $2.30 a share, the company said. Analysts projected $3.04, according to the average estimate in a Bloomberg survey.

Intel's fourth-quarter revenue will be $9 billion, plus or minus $300 million, and profit margins will be short of projections, the Santa Clara, California-based company said in a statement. Intel originally predicted sales between $10.1 billion and $10.9 billion.

Rival Circuit City Stores Inc. filed for bankruptcy protection on Nov. 10, while Macy's Inc., the second-biggest U.S. department-store chain, projected profit declines today, sending its shares down 11 percent.

Paulson Plan

Treasury Secretary Henry Paulson plans to use the second half of the $700 billion Troubled Asset Relief Program, known as TARP, to help relieve pressure on consumer credit, scrapping an effort to buy devalued mortgage assets. The Treasury and the Federal Reserve are exploring a new ``facility'' to aid the market for securities backed by assets, Paulson said in a speech in Washington.

``The markets are probably ill at ease with the concept that TARP funds, which were targeted for financial-sector stabilization, are now getting pushed away from that purpose by the political process,'' said Robert Blake, a senior currency strategist in Boston at State Street Global Markets LLC, which has $15.3 trillion in assets under custody.

The cost of protecting U.S. corporate bonds from default rose the most in more than two weeks on Paulson's revised plan. Credit-default swaps on a benchmark index linked to the bonds of 125 companies in the U.S. and Canada reached the highest in seven days as the government's decision deflated investor confidence that the plan will work.

Yen Rally

The yen rose the most against the euro and the dollar in two weeks as the TARP diversion prompted investors to sell higher- yielding assets.

The pound fell below $1.50 for the first time since June 2002 after the central bank said the British economy will shrink through most of next year as a result of the global credit freeze. The dollar advanced to a two-week high against the currencies of six trading partners on increased demand for the safety of U.S. assets.

The yen climbed 2.9 percent to 94.87 per dollar at 4:05 p.m. in New York, from 97.65 yesterday. It touched 94.48, the strongest level since Oct. 28. Japan's currency increased 3.2 percent to 118.39 per euro from 122.27 and reached 118.11, also the strongest since Oct. 28. The euro dropped 0.4 percent to $1.2478 from $1.2522.

Speculation that the International Energy Agency will cut its global demand estimate tomorrow helped push oil futures down. Energy companies in the S&P 500 lost 7.2 percent as a group, while raw-material producers declined 6.3 percent collectively.

Oil Demand

The IEA is ``more than likely'' to lower its oil-demand forecast for next year in its next monthly oil report, according to Executive Director Nobuo Tanaka. The U.S. Energy Department cut its oil-demand and price forecasts today. A department report tomorrow may show that crude-oil supplies rose last week.

``It's hard to see what will stop this slide,'' said Tom Bentz, senior energy analyst at BNP Paribas in New York. ``It's more of the same. The market is moving on continuing economic concerns.''

Crude oil has tumbled 62 percent since reaching a record $147.27 on July 11. Futures in after-hours electronic trading declined $3.71 a barrel, or 6.3 percent, to $55.62 a barrel.

Treasuries rose, sending two-year note yields to the lowest since 2003 after Paulson's plan was disclosed.

Traders pushed 10-year note yields to the lowest in more than two weeks after Paulson said buying ``illiquid'' mortgage- related assets ``is not the most effective'' use of funds. The Federal Reserve urged banks to keep lending. The Treasury's $20 billion auction of 10-year notes drew less demand than forecast.

To contact the reporter on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net.

Last Updated: November 12, 2008 18:37 EST