Dow plunges
below 10,000
By Michael J. Martinez
Associated Press
NEW YORK >> Investors sent stocks falling sharply for a second straight day yesterday as crude oil prices surged near $55 per barrel and General Motors Corp.'s earnings disappointed the market. The Dow Jones industrial average, having fallen 153 points over two days, dropped back below 10,000.
Crude oil futures continued a record-setting trend yesterday, with prices reaching $54.90 per barrel in intraday trading. 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 closed at a record $54.76, up $1.12, 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."
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.
The Dow fell 107.88, or 1.08 percent, to 9,894.45, its lowest close since Aug. 13, after falling 74.85 the previous session. The Dow closed below 10,000 for the first time since Sept. 27.
Broader stock indicators were substantially lower. The Standard & Poor's 500 index was down 10.36, or 0.93 percent, at 1,103.29, and the Nasdaq composite index dropped 17.51, or 0.91 percent, to 1,903.02.
GM's earnings weighed heavily on automakers and auto parts manufacturer stocks, while an investigation by New York's attorney general into improprieties in a number of insurance companies pressured the financial sector. Only the energy sector managed any meaningful gains, thanks to the continued rise in oil prices.
A raft of disappointing economic figures also weighed 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.
![](OnePixWhite.gif)