send stocks lower
NEW YORK » Jittery investors sold stocks lower yesterday as the downgrade of bonds issued by General Motors Corp. and Ford Motor Co. undermined the market's confidence and erased its earlier modest gains.
Standard & Poor's decision to lower the automakers' debt ratings dragged down the rest of the market, which was already nervous ahead of the U.S. Labor Department's job creation report today.
The debt downgrade came one day after stocks surged in response to billionaire investor Kirk Kerkorian's announcement that he took a large stake in embattled GM.
"The market shouldn't be dropping this much just because of two companies in one sector. Everyone knew Ford and GM were hurting, no matter what Kerkorian did yesterday," said Brian Pears, head equity trader at Victory Capital Management in Cleveland. "It shows the skittishness of this market. Any feelings of bullishness we may have had are very tentative still."
The Dow Jones industrial average fell 44.26, or 0.43 percent, to 10,340.38, ending a four-day winning streak. Much of the loss could be attributed to GM's falling stock price.
Broader stock indicators were narrowly lower. The Standard & Poor's 500 index was down 3.02, or 0.26 percent, at 1,172.63, and the Nasdaq composite index lost 0.43, or 0.02 percent, to 1,961.80.
Advancing issues barely outnumbered decliners on the New York Stock Exchange, where preliminary consolidated volume came to 2.05 billion shares, compared to 2.32 billion Wednesday.
The Russell 2000 index of smaller companies was up 0.42, or 0.1 percent, at 595.64.
Crude oil futures moved sharply higher in afternoon trading after an industry consulting firm issued a report that projected higher energy prices. A barrel of light crude settled at $50.83, up 70 cents, on the New York Mercantile Exchange.
The bond market moved sharply higher as the automakers' debt downgrades sent investors looking for safer government issues. The yield on the 10-year Treasury note fell to 4.15 percent from 4.19 percent late Wednesday. The dollar was lower against most major currencies, while gold prices rose.
Before the automakers' downgrades, stocks traded narrowly higher as investors marked time ahead of today's important job creation report from the Labor Department. The market had been up for four straight sessions, and some analysts had started talking about sustained improvement in the markets. However, the market's mood proved too tentative to keep the rally going.