NEW YORK -A disappointing earnings report from General Motors Corp. and another rise in crude oil prices sent stocks lower yesterday as investors grew even more nervous about the economy.
With GM missing its earnings forecasts by a wide margin and lowering its full-year outlook, Wall Street feared that the slower economy and soaring energy prices could lead other major companies into similar problems.
Crude oil futures continued to rise yesterday, topping $54 per barrel. While crude inventories rose more than expected, according to a government report, reserves of distillates such as heating oil dropped substantially. A barrel of light crude for November delivery was quoted at $54.60, up 96 cents, on the New York Mercantile Exchange.
The biggest thing that would help the markets right now would be a sustained drop in crude oil
but I'm not holding my breath for that said Lincoln Anderson, chief investment officer for LPL Financial Services in Boston. It's drawing attention away from third-quarter numbers that despite GM
are really pretty good.
In mid afternoon trading, the Dow Jones industrial average fell 86.44, or 0.86 percent, to 9,915.89, its lowest level since mid-August.
Broader stock indicators were moderately lower. The Standard & Poor's 500 index was down 7.55, or 0.68 percent, at 1,106.10, and the Nasdaq composite index dropped 13.63, or 0.71 percent, to 1,906.90.
A raft of disappointing economic figures also figured to weigh heavily on the market. According to the Commerce Department, the nation's trade deficit climbed to $54 billion in August, the second-highest level in history and 6.9 percent higher than July. Furthermore, a weak dollar overseas contributed to a 2.9 percent increase in the price of imported goods in September.
The Labor Department reported a larger-than-expected increase in first-time jobless claims last week, with claims rising 15,000 to 352,000. The four-week moving average of claims, seen as a more reliable indicator of unemployment, rose by 4,000 to a seven-month high of 352,000.
With the soft economy and rising oil prices, GM's results were particularly worrisome for investors. The automaker reported earnings of 78 cents per share, far less than the 96 cents per share Wall Street expected.
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The Associated Press
