NEW YORK (CNN/Money) -
Stocks slumped Thursday, after General Motors' late-session profit warning turned a mild slide into a steeper selloff.
The Dow Jones industrial average (down 111.95 to 10,505.83, Charts) and the Nasdaq composite (down 21.97 to 2,070.56, Charts) both lost just over 1 percent.
The Standard & Poor's 500 (down 10.25 to 1,177.45, Charts) index posted a slightly smaller loss.
A spike in oil prices and a profit warning from Verizon set the market off on the wrong foot in the morning, but stocks tried to fight back throughout the session.
However, GM's profit warning, reported just after 3:00 p.m., knocked out any attempts at stabilization, sending the major gauges to their lows of the session.
Stocks have had a tough start to the new year, declining in the first week and seesawing since then. The tide seemed to have turned a bit Wednesday when stocks, after struggling all day, managed a last-hour rally.
But Thursday saw the indexes back in the red.
"I think we are still in a consolidation period," said Barry Hyman, equity strategist at Ehrenkrantz King Nussbaum, "and I think we can't afford to overlook the impact of the economic news on the market. You had a retail sales number this morning that was in line but nothing spectacular and a rise in jobless claims."
Hyman said that the market is continuing to struggle with worries about how strong the economy is going to be this year.
After the close of trade, Sun Microsystems released its quarterly earnings. The company said it earned a penny a share, in line with estimates and an improvement over the 3-cent per share loss it posted a year ago.
Friday brings a slew of economic reports, including reads on business inventories, producer prices, and industrial production and capacity utilization.
Due to ongoing worries about inflation, Friday's most closely watched report is likely to be the producer price index (PPI).
PPI is expected to have fallen 0.2 percent in December, according to economists surveyed by Briefing.com. PPI rose 0.5 percent in November.
The so-called "core" PPI, which excludes volatile food and energy, is expected to have risen 0.2 percent in December, just as it did in November.
GM and Verizon warn
A pair of Dow components issued warnings, not doing much to quash worries that quarterly earnings are set to slow.
General Motors (down $1.07 to $37.32, Research) warned that 2005 earnings will fall sharply and may miss analysts' estimates. Shares slumped 2.8 percent.
Dow component Verizon Communications (down $1.13 to $37.10, Research) slipped for the second session. Shortly before the close Wednesday, the telecom warned that 2005 earnings could be hit by pension and other post-retirement costs, as well as costs related to the sales of some businesses.
Brokerages Credit Suisse First Boston and Robert W. Baird both downgraded the stock, which fell nearly 3 percent.
Fellow Dow component Pfizer (down $0.70 to $25.33, Research) slipped 2.7 percent. The Food and Drug Administration warned the drugmaker about misleading advertisements for its painkillers Celebrex and Bextra, in a letter made public late Wednesday.
A variety of big cap techs slipped as well, with Intel (down $0.34 to $22.82, Research), Microsoft (down $0.51 to $26.27, Research), Yahoo! (down $0.81 to $35.33, Research) and eBay (down $4.04 to $103.21, Research) among the decliners.
On the upside, Apple Computer (up $4.34 to $69.80, Research) reported quarterly earnings, sales, margins and iPod shipments late Wednesday that topped expectations. The stocks ended the session up 6 percent after having been up as much as 13 percent earlier in the session.
Taser International (up $3.79 to $20.80, Research) rallied 22 percent after a study said that its stun gun technology isn't dangerous to heart function, soothing some concerns about the gun's potential hazards.
December retail sales, released before the bell, were mostly in line with estimates.
Sales for the month rose 1.2 percent, after rising 0.1 percent in November; economists thought sales would increase 1.1 percent, according to a Briefing.com survey. Sales excluding autos climbed 0.3 percent, after gaining a downwardly revised 0.4 percent in November; economists thought sales would be up 0.4 percent.
A separate report showed a surprise gain in the number of Americans filing new claims for unemployment last week.
Oil prices spiked 3.6 percent as natural gas prices rose following the release of a report showing sliding reserves.
U.S. light crude oil for February delivery gained $1.67 to settle at $48.04 a barrel on the New York Mercantile Exchange.
Market breadth was negative. On the New York Stock Exchange, losers edged winners by eight to seven on volume of 1.49 billion shares. On the Nasdaq, decliners topped advancers by more than three to two on volume of 2.11 billion shares.
Treasury prices rose, pushing the yield on the 10-year note down to 4.16 percent from 4.23 percent late Wednesday. Treasury prices and yields move in opposite directions.
In currency trading, the dollar rallied versus the euro and was little changed versus the yen.
COMEX gold fell $1.40 to settle at $425.10 an ounce, retreating after several days of gains.
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