A potential bailout for automakers hit a significant roadblock as U.S. Democrats said an aid plan that could be passed by the House and Senate has not been reached; they set a December 2 deadline for automakers to offer a plan reports Reuters on Yahoo News.
“The decline in the oil prices is a barometer of more economic sliding globally,” said Andrew Kanaly, chairman of Kanaly Trust Company in Houston.
The Dow Jones industrial average (.DJI) fell 399.51 points, or 5 percent, to 7,597.77. The Standard & Poor’s 500 Index (.SPX) lost 51.16 points, or 6.34 percent, to 755.42. The Nasdaq Composite Index (.IXIC) was down 60.23 points, or 4.34 percent, at 1,326.19.
An S&P index of energy companies’ stocks fell almost 10 percent. Chevron (CVX.N) lost 6.9 percent to $65.81 and topped the Dow’s major decliners. Rival Exxon Mobil (XOM.N) slid almost 4 percent to $70.58 on the New York Stock Exchange.
U.S. front-month crude oil tumbled below $50 a barrel to settle at a 3-1/2-year low on expectations that demand will plunge in a slowing economy.
Data from the Labor Department showing that the number of U.S. workers filing new claims for jobless benefits hit their highest level in 16 years in the latest week moved investors to the sidelines, along with concern about the future of Citigroup(C.N).
Shares of Citigroup (C.N) continued to slide on expanding worries about whether the second-largest U.S. bank has enough capital to withstand billions of dollars of additional loan losses, which overshadowed fresh support from its largest individual investor.
Citigroup sank 24.2 percent to $4.85.
In contrast, shares of General Motors (GM.N) were up 2.5 percent at $2.87, but Ford (F.N) lost 1.6 percent to $1.24.
The Big Three U.S. automakers are pressing for a $25 billion bailout from the government to avert possible bankruptcy.
In other economic news, factory activity in the U.S. Mid-Atlantic region fell to another 18-year low in November.