GE tumbled 8.2 percent as Standard & Poor’s cut its debt outlook to negative” on concern dwindling earnings at its financial unit may force a credit downgrade. Exxon Mobil Corp. and Chevron Corp. lost about 5 percent as crude slid to a four- year low on speculation production cuts aren’t enough to match a drop in demand. General Motors Corp. plunged 16 percent and Ford Motor Co. almost 10 percent after the White House said it hasn’t made a decision on how to bail out the nation’s carmakers.
The S&P 500 declined 2.1 percent to 885.28. The Dow Jones Industrial Average slid 219.35 points, or 2.5 percent, to 8,604.99, while the Russell 2000 Index of small companies fell 1.5 percent. Benchmark indexes drifted between gains and losses before sliding to session lows late in the day as GE sank.
European stocks fell for a second day as Carrefour SA cut its forecast, overshadowing speculation President-elect Barack Obama will step up efforts to pull the global economy out of recession.
The Dow Jones Stoxx 600 Index bounced between gains and losses as the European Central Bank also cut the rate it charges institutions to deposit money with it overnight in an effort to jolt banks into lending more to each other. The regional benchmark index fell 0.1 percent at 197.31 after earlier climbing as much as 0.6 percent.
The Stoxx 600 has slumped 46 percent this year as credit losses and writedowns at the world’s largest banks surpassed $1 trillion and the U.S., Europe and Japan entered the first simultaneous recessions since World War II.
National benchmark indexes rose in 10 of the 18 western European markets. The U.K.’s FTSE 100 rose 0.2 percent. Germany’s DAX gained 1 percent, led by Siemens. France’s CAC 40 lost 0.2 percent.