U.S. Stocks Tumble

U.S. stocks fell after the Senate’s rejection of a bailout for American automakers threatened to deepen the worldwide recession.

General Motors Corp., the biggest U.S. carmaker, plunged 18 percent and Ford Motor Co. slid 6.2 percent, while Exxon Mobil Corp. and Chevron Corp. dropped as oil declined the most in almost two weeks. Honda Motor Co. and Daimler AG sank more than 4 percent as the failure of the rescue plan sent stocks falling from Tokyo to Frankfurt. Auto shares pared some of their losses after the Bush administration said it may bolster carmakers with money from a fund intended to shore up U.S. banks.

The MSCI World Index of 23 developed stock markets retreated 1.5 percent at 10:05 a.m. in New York. The Standard & Poor’s 500 Index slipped 0.8 percent to 866.9, extending its weekly loss to almost 1 percent. Dow Jones Industrial Average fell 66.75, or 0.8 percent, to 8,498.34.

Emerging-market stocks slumped the most in three weeks on concern the rejection of a U.S. automaker bailout will deepen the global economic slump, sapping demand for metals and energy.

The MSCI Emerging Markets Index lost 3.8 percent to 547.53 at 1:40 p.m. in London, trimming this week’s gain to 10 percent. Russia’s Micex index fell 4.8 percent, after an earlier decline of more than 5 percent forced the exchange to halt trading. Benchmark indexes in Hungary, China, South Korea and Taiwan slipped more than 4 percent.

Asian stocks fell, ending a five-day rally by the region’s benchmark index, after the U.S. Senate rejected a bailout for automakers, threatening to deepen the global recession.

The MSCI Asia Pacific Index lost 3.7 percent to 84.82 as of 7:12 p.m. in Tokyo after senators voted down a bill to provide $14 billion of emergency funds for General Motors Corp. and Chrysler LLC. Honda Motor Co. and Nissan Motor Co. plunged more than 11 percent. James Hardie Industries NV, the biggest supplier of home siding in the U.S., dropped 10 percent in Sydney after U.S. jobless claims soared to a 26-year high.

Japan’s Nikkei 225 Stock Average retreated 5.6 percent to 8,235.87. The CSI 300 Index sank 3.8 percent in China, after a government official said growth will slow more sharply next quarter. South Korea’s Kospi Index lost 4.4 percent, led by KB Financial Group Inc., after the Bank of Korea said the economy will expand at the slowest pace in 11 years in 2009.

TradingEconomics.com, Bloomberg
12/12/2008 7:14:00 AM