GM's drop off pulls down Dow
NEW YORK » Stocks fell in a volatile session yesterday, with a sharp decline in General Motors Corp. dragging down the Dow Jones industrial average, while broader indexes fell slightly in an end-of-year malaise.
General Motors fell to its lowest level since the crash of 1987 after a report by J.D. Power and Associates said it was losing market share to its Asian rivals.
Broader indexes moved lower, despite a bullish report on wholesale inflation, an uptick in home construction for November and a strong earnings report by Wall Street firm Morgan Stanley.
"There's a lot of uncertainty going into the end of the year," said Ralph Acampora, managing director of technical research at Knight Capital Group Inc., an asset management firm.
Traders are especially concerned about future Federal Reserve interest rate hikes and oil prices. Those "crosscurrents" have led to choppy trading in December, a sharp change from the market's November gains, Acampora said.
A strike by New York City transit workers had little effect on volume, which was slightly lower than Monday's shares traded.
The Dow Jones industrial average fell 30.98, or 0.29 percent, to 10,805.55.
Broader stock indicators were slightly lower. The Standard & Poor's 500 index fell 0.30, or 0.02 percent, to 1,259.62, and the Nasdaq composite index fell 0.32, or 0.01 percent, to 2,222.42.
Bonds moved lower, with the yield on the 10-year Treasury note rising to 4.47 percent from 4.44 percent late Monday. Crude oil futures edged higher ahead of today's weekly inventory data, with a barrel of light crude quoted at $57.98, up 64 cents, on the New York Mercantile Exchange.
In economic news, a jump in home construction last month helped ease worries about the cooling housing market. Housing starts rose to an annualized rate of 2.123 million homes in November, up from October's rate of 2.014, according to the Commerce Department. The number of permits issued also rose to an annualized rate of 2.155 million last month, up from 2.103 million in the month prior.
The increase may have been due to November's warm weather, UBS economist Maury N. Harris wrote in a research note.
The Labor Department's producer price index for November, which measures inflation, showed overall producer prices fell 0.7 percent for the month as energy prices declined. Economists had expected a 0.5 percent drop.