Stocks fell in a volatile session Tuesday, 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 is losing market share to its Asian rivals.
Broader indexes moved lower, despite a bullish report on wholesale inflation, an up tick 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 even with Monday’s shares traded.
The Dow Jones industrial average finished the day down 30.98 points, or 0.29 percent, while the broader Standard & Poor’s 500-stock index lost 0.30 point, or 0.02 percent. The Nasdaq composite index, full of technology stocks, fell 0.32 point, or 0.01 percent.
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 last month may have been due to November’s warm weather, UBS economist Maury N. Harris wrote in a research note.
Bonds moved lower, with the yield on the 10-year Treasury note rising to 4.47 percent from 4.44 percent late Monday. The dollar rose against most major currencies, while gold prices were mixed. Crude oil futures edged higher ahead of Wednesday’s weekly inventory data, with a barrel of light crude quoted at $57.70, up 64 cents, on the New York Mercantile Exchange.
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.
Even with energy prices removed, so-called “core” PPI rose just 0.1 percent, versus the 0.2 percent hike expected on Wall Street. With inflation remaining relatively tame, the Federal Reserve is considered more likely to halt its current regime of rate hikes soon.
In company news, General Motors stock fell $1.20, or 5.7 percent, to $19.85, its lowest level since October 1987. Along with the report saying the company was losing market share, GM also recalled more than 400,000 vans because of faulty seatbelts.
Morgan Stanley’s record quarter sent its shares up $1.04 to $57.71. The company’s quarterly earnings surpassed Wall Street’s forecasts by 34 cents per share before a one-time tax benefit.
Wal-Mart Stores Inc. is the subject of a federal criminal investigation for the way it transports hazardous materials from its stores. In a regulatory filing, the retailer said the probe centers on the transportation of paint, broken aerosol cans and other potentially hazardous items. Reports of a shooting at a New Mexico Wal-Mart further hurt the stock, which fell 36 cents to $48.60 on the news.
Qwest Communications International Inc. fell 12 cents to $5.65. Former CEO Joseph Nacchio was indicted on 42 counts of insider trading for illegally selling off more than $100 million in stock. The indictment is the first criminal charge against Nacchio in the government’s nearly 4-year-old investigation of accounting at Qwest, a regional telecom company.
Overseas, Japan’s Nikkei average surged 1.62 percent. Britain’s FTSE 100 rose 0.15 percent, Germany’s DAX index rose 0.12 percent and France’s CAC-40 rose 0.18 percent.