NEW YORK – Stocks slid Monday, with the Dow and S&P 500 hitting the lowest level in about five months, after General Motors Corp. (GM) said auto parts supplier Delphi Corp.'s bankruptcy filing could cost it as much as $12 billion.
The Nasdaq Composite Index slipped to a three-month low.
After the closing bell, shares of Dow component Alcoa Inc. (AA) rose 2 percent to $23.10 after the world's biggest aluminum producer reported slightly higher third-quarter profit in spite of soaring energy and raw material costs. During regular trading, Alcoa fell 1.7 percent to $22.66.
Alcoa already had warned its results would fall short of expectations.
The Dow Jones industrial average (search) fell 53.55 points, or 0.52 percent, to end at 10,238.76. The Standard & Poor's 500 Index (search) slipped 8.57 points, or 0.72 percent, to finish at 1,187.33. The technology-laced Nasdaq Composite Index (search) dropped 11.43 points, or 0.55 percent, to close at 2,078.92.
"Delphi is weighing on the whole automotive industry," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York. "More people want to move money out of that sector, and the situation is not going to get better any time soon."
Delphi, the No. 1 U.S. auto-parts supplier, filed for bankruptcy Saturday, leading GM, which spun off Delphi in 1999, to warn of the possibility of costly supply disruptions.
GM shed 9.9 percent, or $2.81, to $25.48 on the NYSE. Brokerage Banc of America cut its rating on the stock to "sell" from "neutral," citing possible risk from Delphi. . S&P cut its credit ratings on General Motors deeper into junk status.
Standard & Poor's and Fitch cut ratings on Delphi. Delphi shares fell 79 cents to 33 cents on the NYSE.
Ghriskey said investors also were waiting to see the effect of oil prices on company earnings. U.S. crude futures for November delivery declined just 4 cents to settle at $61.80 a barrel after falling as low as $60.35 earlier in the day.
Energy shares also weighed on the broader market after crude oil prices -- though still above $61 a barrel -- ended the day down. Exxon Mobil Corp. fell 1.9 percent, or $1.10, to $58.50 on the NYSE. The stock was one of the biggest drags on the Dow and the S&P 500.
"Given the spike in oil during the third quarter, I think we're going to see higher oil costs in manufacturing companies and lower sales in consumer companies from oil squeezing out other purchases," Ghriskey said.
The Nasdaq succumbed to the weight of technology shares, which eased after Xilinx Inc. (XLNX ), a maker of programmable microchips, cut its sales estimate for the September quarter, citing weakness in Asia-Pacific demand and other factors. Its stock fell 16 percent, or $4.35, to $22.77 on Nasdaq.
Dana Corp. (DCN ) , another auto parts maker, said it will restate earnings for 2004 and the first half of 2005 and delay posting third-quarter 2005 earnings, citing accounting problems. Its stock fell 34.3 percent, or $3.15, to $6.04 on the NYSE.
Among the gainers in the Dow was International Business Machines Corp. (IBM ), whose shares rose 0.93 percent, or 75 cents, to $81.25 on the NYSE after Citigroup upgraded its rating on IBM to "buy" from "hold."
Other Dow advancers included shares of Wal-Mart Stores Inc. (WMT ) which gained 1.2 percent, or 51 cents, to $44.54 on the NYSE. Over the weekend, Barron's quoted an analyst who said the stock could rise as high as $63 in the next year.
On Wall Street, most of the action was in the stock market. The U.S. bond market was closed for the day because of the Columbus Day holiday.
Trading was active on the New York Stock Exchange where decliners beat gainers by almost 2.5 to 1. About 1.64 billion shares were traded, above the 1.46 billion daily average for last year.
On Nasdaq, decliners outnumbered gainers by a ratio of almost 2 to 1, with about 1.42 billion shares changing hands, below the 1.81 billion daily average last year.