U.S. stocks fell, adding to two months of losses for the Standard & Poor's 500 Index, after results at General Motors Corp. and NYSE Euronext disappointed investors and oil prices jumped by $4 a barrel.
GM, the biggest U.S. automaker, slumped after posting a $15.5 billion loss on plunging U.S. sales. NYSE Euronext dropped the most since June, sending financial shares to a second straight retreat, after record trading at European exchanges failed to boost earnings above analysts' projections. Macy's Inc. and Expedia Inc. led retailers lower after the jobless rate climbed to 5.7 percent in July and oil rallied.
The Standard & Poor's 500 Index declined 7.96 points, or 0.6 percent, to 1,259.42 at 11:23 a.m. in New York. The Dow Jones Industrial Average lost 71.97, or 0.6 percent, to 11,306.05 and the Nasdaq Composite Index slipped 27.4 to 2,298.15. Almost two stocks retreated for each that rose on the New York Stock Exchange.
"The economy is slowly rolling over," said Charles Knott, who oversees $800 million as chief investment officer at Knott Capital Management in Exton, Pennsylvania. "We're prepared for more on the downside and continue to be very cautious. If we have a sustained recession, GM and Ford are in a heck of a lot of trouble."
The S&P 500 trimmed its rebound from an almost three-year low on July 15 to 3.7 percent as all of its 10 industry groups retreated except for energy producers. The decline left the benchmark for U.S. equities little changed this week after it fell in eight of the previous 10 weeks.
Earnings have slumped by an average 20 percent in the second quarter for the 352 companies in the S&P 500 that have reported results so far, data compiled by Bloomberg show. Companies have trailed analysts' estimates by an average of 5.2 percent, even as the majority beat projections.
Still, only two industry groups have reported a decrease in average earnings. Profits have slumped 82 percent at S&P 500 financial firms and 5.4 percent at companies that sell consumer goods, according to the Bloomberg data.
For all U.S. companies, GM's loss dragged earnings at companies that rely on discretionary consumer spending to an 84 percent decline, the biggest retreat among 10 industries and more than the 74 percent decline at financial firms.
Stocks tumbled yesterday after economic growth trailed forecasts, jobless claims rose and Exxon Mobil Corp.'s profit missed analysts' estimates.
GM's deficit of $27.33 a share marks the company's fourth straight quarterly loss and compares with a profit of $891 million, or $1.56, a year earlier. Sales fell 18 percent to $38.2 billion, the Detroit-based automaker said in a statement today. The shares lost 1.8 percent to $10.87.
NYSE Euronext fell $5.81, or 12 percent, to $41.43. The world's largest owner of stock exchanges said profit excluding some costs was 75 cents a share, missing the 78-cent average estimate of analysts surveyed by Bloomberg.
Macy's slumped 1.4 percent to $18.54. Expedia lost 4.7 percent to $18.65.
The jobless rate rose to 5.7 percent in July from 5.5 percent the prior month as employers cut 51,000 jobs, the Labor Department said. Economists had forecast an unemployment rate of 5.6 percent.
"We're losing jobs and haven't fully resolved the issues in the housing market," said John Davidson, president of PartnerRe Asset Management, which oversees $12 billion in Greenwich, Connecticut. "There's still a lot for equity markets to deal with."
Crude oil rallied after Israeli Deputy Prime Minister Shaul Mofaz said that Iran is on a path toward a "major breakthrough" in its nuclear program. Crude for September delivery rose $4.10, or 3.4 percent, to $128.26 a barrel at 10:07 a.m. on the New York Mercantile Exchange.
Banks slumped as Citigroup Inc. said its sale of auction- rate securities is being formally investigated by the U.S. Securities and Exchange Commission after the market froze in February, leaving investors stuck with bonds they couldn't sell.
Citigroup and other firms that sold the securities have received subpoenas and information requests from state, federal and industry regulators, the bank said today in an SEC filing.
Citigroup slumped 1.9 percent to $18.33. The S&P 500 Financials Index lost 0.7 percent, its third drop of the week.
All of the 23 developed nations in the MSCI World Index except for Canada have experienced bear-market plunges of 20 percent or more since September as credit losses surged and record commodity prices stoked inflation. Brazil last week became the 23rd out of 25 developing countries in the MSCI Emerging Markets Index to enter a bear market. Only Jordan and Morocco avoided such slumps.
The S&P 500 has declined 19 percent since its October record as financial institutions worldwide posted $480 billion in writedowns and credit losses stemming from the collapse of the subprime mortgage market. Equities also retreated as inflation increased, giving the U.S. consumer price index the steepest gain since 1991.