That’s the worst one-month loss since 2001, and the unemployment rate rose to a 14-year-high of 6.5%. The swiftness of the rise in unemployment is stunning, as the household jobless rate stood at 5% as recently as April. The labor force participation rate was up by about 300,000, which suggests that the woeful economic situation is forcing people to continue to look for work.

“The consumer balance sheet pressures are likely to keep more individuals actively looking for work, regardless of whether that work is plentiful,” writes Guy Lebas, fixed-income strategist at Janney Montgomery Scott. “As a result, we could see a peak in the unemployment rate that exceeds the 7.8% hit in the wake of the 1990-1991 recession.”

There had been a sense that the two-day 9.7% decline in the Dow industrials reflected, in part, the desire to get ahead of the anticipated lousiness of this jobs data, but this exceeded the scenario investors had accounted for, judging by the pullback in equity futures. Standard & Poor’s 500 index futures were lately up 5.4 points, compared with a gain of 9.5 points prior to the report.

Meanwhile, more bad news came from Ford Motor, which reported a 9 million third-quarter loss, and about a billion operating loss from continuing operations. The company burned through .7 billion in cash in the quarter, and that rate has concerned investors and ratings agencies. Ford was up 5.5% in premarket action. General Motors is set to report earnings at 10:30 a.m. ET, an odd intra-day report.

Shares of AutoNation Inc., along with the shares of the major auto rental companies, have been hit just as hard as the major automotive manufacturers as the economy has slid into a recession. The stock was off 63% on the year as of Thursday’s close, and the major rental names were worse, which explains CEO Michael Jackson’s assertion that it would be a “travesty” that the auto industry could collapse while Wall Street receives billions in bailout money.

U.S. sales of new vehicles fell by 30% in October, and the reduction in credit lines offered by the major auto companies has hurt sales at the likes of AutoNation, which reported a loss of .4 billion from a million profit one year ago, as revenue fell 21%.

The rental companies, meanwhile, are facing reduced demand as a result of declining travel, and their plans to sell off cars (known as “de-fleeting”) is running into reduced demand for vehicles in general, hurting their profits. A weak market for used cars means those companies may have to increase the depreciation expenses, and several analysts lowered estimates after Hertz Global Holdings said this week that revenue fell 1.1% on a year-over-year basis.

Shares of Hertz are off 63% on the year, while Avis Budget Group is down 85%, and Dollar Thrifty Automotive Group has lost 93%.

There’s that old saw about how at a poker game, if you look around the table and can’t recognize who the sucker is, it’s you. Yahoo’s Jerry Yang might have some experience in this matter.

Shares of Yahoo were down 15%, one day after the dissolution of a revenue-sharing deal with its larger competitor Google, and pointedly, after Microsoft’s CEO Steve Ballmer dismissed the idea of a merger with the struggling Internet company, which rejected a deal with Microsoft several months ago.

It is, in hindsight, not one of the savvier plays of the year. Yahoo rejected an unsolicited .5 billion takeover attempt by Microsoft, but Mr. Yang Wednesday said at an industry conference that Microsoft’s best option was to buy his company, which Yahoo suddenly seems more willing to unload.

Mr. Ballmer, for now, isn’t rushing back to the table. “We are not interested in going back and re-looking at an acquisition,” Mr. Ballmer told a business group. “We made an offer, we made another offer — it was clear Yahoo didn’t want to sell the business, and we moved on.”

As the shares have declined, trading in the options market seems to suggest that the stock is undergoing an excessive amount of punishment. Activity was high in the November calls, where more than 14,000 contracts had changed hands in the early going, which suggests that people are saying “the stock is being massively oversold and people are looking for it to rebound in short order,” says Jocelynn Drake, analyst at Schaeffer’s Investment Research.

A stock performance like this does not give one a lot of leverage. (YHOO, 1 year)

However, the activity is going in both directions, and action in the December and January options do not suggest an undercurrent of optimism that a deal between Microsoft and Yahoo will get done, even a search partnership deal. Mr. Ballmer said that there are still opportunities “for some kind of partnership on search,” and Youssef Squali, analyst at Jefferies & Co., predicted that such an offer would come from Microsoft by the end of the year.

Mr. Squali says a search deal with similar terms as the offer in July would guarantee annual cash flows of .3 billion to Yahoo, and such an offer would result in a net present value of about billion, or about a share. (Mr. Squali does not own the shares — he has a price target on Yahoo.)

“At the end of the day a search deal is very much in the cards,” he says. “We expect the terms to be somewhat similar, as opposed to saying we gave you , now we’ll give you . The underlying asset if anything has improved, while Microsoft’s search engine has not.”

Which means, more than likely, it will need some kind of help from the government, perhaps to engineer some kind of merger. The company’s shares were halted at .84 before releasing its earnings — which were released late — and before trading was restarted, the bid-ask spread was .25 to .25 a share. Yes, that’s a spread on a stock.

The conference call is beginning at 12:15 p.m. ET, and one will see how Ray Young, GM’s CFO, finesses the myriad issues.

12:14 p.m.: Sedating hold music is playing, perhaps to lure analysts to sleep so they avoid asking probing questions. Shares of the stock are down 10% to .32 a share.

12:19 p.m.: We’ve now been told to stand by twice. Sort of like being on hold with the cable company.

12:22 p.m.: CEO Rick Wagoner is going to provide opening remarks, and will be followed by Fritz Henderson. The corporate treasurer, corporate comptroller, and a few others are on the call.

12:23 p.m.: Mr. Wagoner is talking about how this is a “tough quarter in an extremely difficult market environment.” He talks about their business strategy, but then — for the second time — mentions the decline in sales as a result of the credit crisis. Clearly, the plan is to put as much of this on the credit environment and Wall Street’s troubles as possible, justifying more help from the federal government. He notes that car dealers and others are having trouble getting credit. The company is making significant cuts in spending.

“It’s fair to say liquidity is the top priority for the company and the industry right now,” he says. He notes contacts in Washington meeting with Congressional, Senate and Bush Administration officials to talk about the industry.

12:26 p.m.: Mr. Wagoner just threw cold water on the possibility of a Chrysler merger, saying that they’ve “concluded at this particular time that we put 100% of our efforts on our immediate liquidity challenges,” and therefore an acquisition isn’t in the cards right now. Shares are down 13%.

12:28 p.m.: President Fritz Henderson takes over, talking about the economy, which stinks. The chart set is here (PDF document). “I would not say we’ve returned by any sense to normalcy, not even close,” Mr. Henderson says, discussing the credit problems that are thawing — but only a bit.

12:30 p.m.: “The credit markets are frozen, with some thawing.” He notes that what is unknown includes the impact of consumer savings and deleveraging or how long the recovery will take. “It’s our view that when the recovery begins, and it wills, we do think we will see changes in consumer savings rates and deleveraging in consumer balance sheets,” he says.

12:33 p.m.: Global sales peaked in January 2008. Total sales in 2007 were about 71 million, and in 2008 are expected around 69 million, and sales in North America and western Europe are now “below replacement rate.” GM’s U.S. sales came in at a seasonally adjusted annual rate of 10.9 million in October, which is just, well, terrible.

12:35 p.m.: “The conclusion we’ve reached is to plan the business more conservatively.” Oh, you think so, doctor? The company is modeling a seasonally adjusted annual rate of 11.7 million sales, and at 12.7 million for 2010.

GM has a ton of savings planned and some underway. About billion were announced in July 2008; about billion of this is on-track or largely complete, while asset sales are ongoing, but “the availability of liquidity in many ways drives your ability to execute asset sales…our ability to close those sales is uncertain.”

12:39 p.m.: The company had plans to raise billion to billion through the credit markets, and they’re not close to getting that done. The next steps? Another billion in cuts, including working capital improvements, salaried cost reductions, and capex reductions. So it’s kind of a line-item veto of almost everything. Capital spending for 2009 has been dropped to .8 billion from .2 billion. Yecch.

12:43 p.m.: The company is selling Hummer, Strasbourg and ACDelco, businesses that are being hurt by the tough credit-market environment.

Liquidity at GM continues to decline. (Source: GM)

12:44 p.m.: Ray Young has taken over, going through the big numbers — a GAAP loss of .5 billion or .45 a share, and third-quarter liquidity of .2 billion, down from billion in the second quarter. The company needs money, badly.

12:51 p.m.: Michigan Governor Jennifer Granholm, with some impeccable timing, comments on GM and rival Ford Motor’s results: “These third quarter results make it increasingly clear that under these extraordinary conditions, the industry cannot continue its progress alone. We must support a historic pillar of our nation’s economy and help the industry bridge this period until our economy stabilizes.” Shares are down 14%.

12:52 p.m.: The company’s hedging exposures ended up contributing to a .5 billion loss for the quarter; the year-over-year impact was a .4 billion loss. About 50% of the company’s exposure to commodity markets is hedged.

1:01 p.m.: Mr. Young says he’s not commenting on GMAC’s results, telling people to address GMAC directly if need be…probably because this presentation has so much in it. But the impact of GMAC not being able to lend, and that tightening of lending facilities hurts auto sales. We’re now on page 33 of a 50-page presentation. Whew.

1:08 p.m.: Do the math. The company has a debt balance of .3 billion and a liquidity position of .2 billion. So it has a net liquidity position of -.1 billion. Meanwhile, Rick Wagoner was just on CNBC, so it’s clear he didn’t stick around for the rest of this call. (At this point it is getting difficult to blame him.)

1:19 p.m.: The company is filing a form 8-K later in the day, which will contain more information about liquidity. Mr. Young says the third-quarter cash burn rate is “not indicative,” but that it does have a “challenging” period ahead of it. “The U.S. automotive industry is a critical part of the economy,” he says.

1:20 p.m.: Finally, questions. Holy moly. The analysts go first. John Murphy from Merrill Lynch is first. He wants to know why the company is reducing product launches, suggesting the company is cutting its launch schedule by about half. He says it raises concern about the size of the company “going forward” and its market share. Mr. Henderson responds by saying that the large launches it expects to go forward with in 2009 will be released. He says, in addition, certain power train and emerging-markets spending that was on tap has been indefinitely deferred, as opposed to a significantly reduced launch schedule. “We tried to preserve as much as possible of our core launches,” he says.

1:29 p.m.: Chris Ceraso of Credit Suisse wants to know about the possibility of granting equity in the company if the government put capital into the company. Officials say they have not determined how that might take shape. Shares are down 13%.

1:31 p.m.: Mr. Ceraso wants to know, based on the liquidity situation, about the risk that suppliers tighten up on them and “go COD,” and Mr. Henderson says that it is a risk factor, and is “always a risk,” but so far the company thinks its relationship with its suppliers are good and that will continue to work with them.

1:34 p.m.: Brian Johnson of Barclays Capital is curious about accounts payable, considering its lack of liquidity. “We have a lot of payables that are at the first of the month, but they are across the month,” Mr. Young says.

1:38 p.m.: Himanshu Patel of J.P. Morgan asks Mr. Young wants to know about the discussions with the government, and the prevailing thought process in terms of who would get what money, but Mr. Young defers, saying there is little to be said. He also presses on Chrysler, asking for help in understanding what the “impediments were for that deal to not go through.” Mr. Henderson notes that the acquisition had long- and short-term benefits, but the company’s near-term responsibility is management of its liquidity position.

1:41 p.m.: Rod Lache of Credit Suisse wants to know what an appropriate level of debt would be given the government loans, and Mr. Young says the company remains singularly focused on the prime goal, which is to improve its liquidity. “Should we be assuming on the cost savings front that at this point you’re cutting to the bone or are there still other structural cost savings that you would be able to accomplish if you had the liquidity?” Mr. Lache asks. “I think we are cutting to the bone actually, but given the situation I think that’s = appropriate and I think the way you should think about that number is we’re pulling it foward is actually the way I think about that number,” says Ray Young.

1:48 p.m.: The analyst portion ends, and with it, the MarketBeat live-blog.

One of the nastier features of the October crash was the habitual Friday sell-off, but some long-term investors are hoping to use this tendency to their advantage.

While the market has taken notably dire turns in the last month and a half on each day of the week, Friday has been among the worst. In each of the first four Fridays of October, the Dow Jones Industrial Average slid more than 1%, including a more than 3% drop on Oct. 24. Not wanting to be exposed to stocks without the ability to pare down a position has led many traders to say they’d rather collect interest on cash over the weekend then risk a big weekend downturn.

But starting on Halloween, and continuing again Friday, as the concern over weekend exposure has found traction among even the most retail of traders, floods of long-term investors that must maintain positions in equities have begun to see Friday as the best day of the week to buy.

“For buyers, every day of the week matters,” said Gerry Sparrow, president and chief investment officer for St. Louis-based Sparrow Capital Management. “On Mondays, the market has been strong, and on Friday it’s been weak. For us, Monday is now a day to sell and Friday the time to buy.”

Mr. Sparrow and other long-term investors say Friday has been their busiest buy session in the past couple weeks, with quantitative fund managers noting that their computer programs have also highlighted Friday as a smart time to enter the market, especially late in the day.

Much of the Friday declines have been exacerbated by late-afternoon sell-offs thanks to hedge funds – not the most long-term investors. As hedge funds rework their portfolios to make sure they have enough cash on hand to satisfy redemptions, the fear of a weekend downturn that can’t be traded on has left many on the sidelines from Friday at 4 p.m. EDT to Monday at 9:30 a.m. EDT.

As such, Monday has been one of the best days of the week recently, including an 11% gain for the Dow on Oct. 13 and a 5% gain on Oct. 20, even while the large index was marking one of the worst months in its history. Tuesday has seen similar gains, with an on average 1.15% increase since Oct. 1.

But come the back half of the week, hedge-fund and institutional-trader selling has taken hold. Wednesday and Thursday both sport multiple sessions in the past month with Dow declines of roughly 5% or more, including the worst two-day point drop in the Dow’s history just this week.

Marc Groz, chief investment officer for Stamford, Conn., hedge fund Topos LLC, said all things being equal, Friday still looks like a relatively poor risk proposition. Mr. Groz said Topos doesn’t advise making a position in something late on Friday and then have no ability to “defend” it until Monday. Mr. Groz notes the futures market remains thinly traded even into Sunday night.

“These kind of patterns are extremely volatile. We size our bets based on degrees of knowledge and conviction, and, in general, this isn’t the strongest pattern in the world,” said Mr. Groz. Moreover, Friday has historically been one of the weaker volume sessions of the week, suggesting that neither a gain nor a big sell-off could have major traction in the week to follow.

As the bear market grinds on, alternating spates of solid rallies with a few days of depressing declines that take the spring out of investors’ step, there remains, as always, the desire for the clarity of capitulation — that moment when the cupboard is bare, and there is nowhere to go but up.

Laszlo Birinyi of Birinyi Associates says investors should divorce themselves from this, no matter which type of capitulation they’re waiting for: the big selling crescendo (similar to the horrid downturns of mid-October), or the petering out of volume as depression sets in and investors sit on their hands.

“In the stock market, capitulation at market bottoms is a sterling example of an issue which is not only wrong, but potentially costly as investors wait for a bus that never arrives,” he writes.

He notes that in August 1982, a number of market technicians were proclaiming that the necessary washout had not occurred, when in fact the market had already bottomed. In 1990, investors and analysts spent most of the fourth quarter searching for a bottom that had happened, and in 2002, the market underwent a subtle shift from bear to bull as investors continued to wait for declines.

The Bank of England apparently found the need for a jolt to their system, so it cut rates by 1.5 percentage points to 3%, its lowest level since 1954, further inciting worry about the state of worldwide growth. “This extreme move by the BoE demonstrates the significant about-face in their outlook from just two short months ago when rates were still on hold,” write analysts at Scotia Capital. Similarly, the Swiss National Bank reduced rates in an unexpected move.

U.S. futures are lower. The S&P 500 looks set for a sharp decline, down 17.7 points, but that’s a paltry decline when considering the 3.3% drop in the U.K. and 6.5% tumble overnight in Japan.

Cisco Systems was off 4.5% headed into the open after the networking giant indicated that it believes that the slowing pace of economic growth will impact its sales in coming quarters. Cisco’s CEO John Chambers was particularly harsh in his assessment, saying revenue in the current quarter would likely decline 5% to 10% from a year earlier. He said, however, that this environment is one of the most difficult times in terms of providing reliable expectations for growth.

However, the move in the pound, along with recent strength in the dollar, suggest that investors are beginning to take a longer view of the recent activity from central banks, putting more of their assets on those that seem more inclined to favor stimulus.

“People are very fearful of deflation and deep recession, so they’re less inclined to price on short-term differentials but more on who is putting in the system,” says David Gilmore, partner at Foreign Exchange Analytics.

The euro was weaker against the pound, buying 0.806 sterling of late, compared with 0.812 sterling on Wednesday, after the Bank of England surprised observers with a 1.5-percentage point reduction in its key lending rate, and the European Central Bank took the more predictable, conservative approach with a half-point cut to 3.25%. The disappointment was heightened as it came after the Bank of England’s move.

“The [Bank of England] rate cut made sense to show they’re not behind the curve any more,” says Ulrich Leuchtmann, head of forex research at Commerzbank in Frankfurt, Germany.

The strength in the pound may not persist, and the dollar is likely to continue to improve against the U.K. currency, as Mr. Gilmore says “risk aversion and deleveraging” remain the dominant factors for forex investors, and that points to more gains by the dollar and yen against other major currencies.

The ECB’s recalcitrance to move more aggressively may soon be tested, regardless of their singular focus on inflation indicators. Germany posted an 8% decline in orders in September, and is down 9% on a year-over-year basis.

On a bad day in the markets, GM is getting wrecked, down 14% to .80 each, while Ford is down 8.6% to .91 a share. Neither company is in particularly good shape. GM is expected to report a loss of .51 a share on revenue of .34 billion, down from .83 billion a year earlier, according to the Thomson Reuters consensus, but those estimates were expected to get revised lower as analysts react to a larger-than-expected loss at General Motors Acceptance Corp., the financing arm of GM. That company posted a loss of .5 billion, but, more importantly, said it has met with funding challenges. That augers for trouble at GM, as auto loans have been the lifeblood of sales for, well, ages.

Oddly enough, GM will issue results during the trading session–at 10:30 a.m. ET–instead of before the market open as it usually does, and when Ford will release its financial results. In the meantime, GM and Ford are looking to solidify the infusion of capital through the loan package approved by Congress, and GM still is looking for additional funds to finance a potential merger with Chrysler.

John Neff of Autoblog.com notes that President-elect Barack Obama pledged support for the auto industry, so it wasn’t surprising to see GM release a statement Thursday welcoming Mr. Obama’s pledge “to support our nation’s domestic auto industry in its ongoing efforts to transform its business and develop new technologies.” (A long line of people who want money will be forming outside the Oval Office, and apparently, GM got there first.)

Some find the possibility of an infusion to help smooth a merger odd. “They’re in a predicament because they make cars that aren’t desirable; the money has been designed to help companies retool and find ways to make fuel-efficient autos that consumers will want and purchase,” says Robert Pavlik, chief investment officer at Oaktree Asset Management. “That’s for the good of the country, but if the companies can’t survive they shouldn’t be in business.”

For its part, Ford is expected to post a loss of 93 cents a share on revenue of billion, down from .27 billion a year ago.