Bad news drives
stocks downward

NEW YORK » Jittery investors sent stocks tumbling yesterday as Wall Street was pummeled by a sharp climb in oil prices, rising unemployment and a disappointing forecast from General Motors Corp. The Dow Jones industrials shed nearly 112 points.

Crude oil futures extended their gains, surpassing $48 per barrel and closing at a six-week high, as investors worried about declining U.S. reserves, the Iraqi elections and evidence of OPEC production cuts. A barrel of light crude was quoted at $48.04, up $1.67, on the New York Mercantile Exchange.

Wall Street also was unnerved by the latest first-time jobless claims report, which showed a jump of 10,000 claims to 367,000 last week, a three-month high. After last Friday's modest job creation report, the labor market remained a major concern for investors.

But while the markets held on with only modest losses through most of the day, General Motors' outlook -- at the low end of Wall Street expectations -- sent stocks tumbling.

The Dow fell 111.95, or 1.05 percent, to 10,505.83.

Broader stock indicators also fell sharply. The Standard & Poor's 500 index was down 10.25, or 0.86 percent, at 1,177.45, and the Nasdaq composite index lost down 21.97, or 1.05 percent, at 2,070.56.

Mediocre economic data and surging oil prices, combined with continued investor unease about the profit outlooks for 2005, have overshadowed strong earnings reports this week from tech heavyweights Intel Corp. and Apple Computer Inc.

"These (earnings) numbers are unambiguously good, and you're seeing a nice runup in those stocks, but they aren't spilling over into the rest of the sector," said Russ Koesterich, U.S. equity strategist at State Street Corp. in Boston.

Analysts said investor nervousness has pressured stocks, but strong economic reports and more positive earnings statements could shake the market out of its malaise.

There was upbeat news from Apple, which had an impressive fourth quarter, beating Wall Street profit forecasts by 21 cents per share. The company credited strong sales of its popular iPod music player for quadrupling its profits from a year ago. Apple climbed $4.34 to $69.80 after reaching a four-year high in intraday trading.

Dow component GM fell after predicting 2005 earnings of $4 to $5 per share. Wall Street analysts had projected $4.78 per share. The outlook was disappointing given GM's projected earnings of $6 to $6.50 for 2004. General Motors fell 99 cents to $37.40.