Stock prices tumbled today as investors registered their worries about a deepening recession, big budget deficits and a gigantic loss posted by General Motors Corp. for the third quarter.
The Dow Jones industrial average, which traces the price movements of 30 important stocks, closed at 837.99, down 10.28 points on the day. Stock prices started falling from the opening 10 a.m. bell on the New York Stock Exchange and fluttered downward most of the day.
No one expected General Motors, the nation's biggest car maker, to report a profit in the third quarter. But few analysts or investors were prepared for the $468 million loss that the nation's third-largest industrial corporation incurred. The GM loss reflects deepening problems in the automobile industry, which is beset by rising costs, high interest rates and weak car sales which may get weaker if the economy heads into a general recession.
Ford Motor Co. and Chrysler Corp. have not yet reported their third-quarter earnings, but both automakers are expected to face large losses as well.
General Motors stock fell $1 a share to $39.375, its lowest level in a year. Ford slipped 75 cents to $17.25 a share, and Chrysler, whose back has been to the financial wall for several years, lost a quarter to $4.125.
Jerry Hinkle, chief trader at the brokerage firm Sanford C. Bernstein & Co., said that while the unexpectedly large GM loss played a role in today's market decline, much of it cannot be attributed to any particular factor. He cited Thursday's report that orders for durable goods declined 2.9 percent in September.
The Labor Department report that consumer prices rose 1.2 percent in September, or at a compound annual rate of 15.4 percent, did not help matters either.
Volume was not exceptionally strong today. About 42.4 million shares changed hands on the New York Stock Exchange. On Thursday 40.63 million shares were traded. So far this year, the New York exchange has had average volume of about 44 million shares a day.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 50.08 million shares.
The New York exchange's own index fell 0.56 point to 68.83, Standard & Poor's index of 400 industrials lost 1.21 points to 132.52, and S&P's 500-stock composite index was down 1.04 points at 118.60.
The American Stock Exchange market value index fell 1.95 points to 307.35, and the NASDAQ composite index for the over-the-counter market closed at 191.91, down 0.52 point.
Bond prices, which had performed well throughout most of the day in contrast to stocks, fell about $5 for each $1,000 of face value after a late afternoon report from the Federal Reserve Board that the money supply declined $1.5 billion last week. Analysts had anticipated a much sharper decline.