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| Some see GM bankruptcy risk rising
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One analyst puts bankruptcy at GM at 30% after Delphi filing, but another disagrees.(Full story.)
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NEW YORK (CNN/Money) -
Stocks slumped Monday, falling to fresh multimonth lows as Delphi's bankruptcy filing sparked a big selloff in the auto sector and inflation worries remained in place across the board.
As of 5:45 p.m. ET, Nasdaq and S&P 500 futures pointed to a mixed open for stocks, when fair value is taken into account.
The Standard & Poor's 500 (down 8.57 to 1,187.33, Charts) index lost 0.7 percent and the Dow Jones industrial average (down 53.55 to 10,238.76, Charts) lost 0.5 percent, both falling to five-month lows. The Dow's biggest loser was GM, down almost 10 percent.
The Nasdaq composite (down 11.43 to 2,078.92, Charts) lost 0.5 percent, falling to a fresh three-month low.
The day brought a mix of competing influences for the market, noted Peter Cardillo, chief market analyst at S.W. Bach & Co., including weakness in the auto sector amid the Delphi filing and the aftereffects of last week's big selloff.
"Last week, we encountered an ugly week for stocks as the market discounted higher interest rates," Cardillo said.
Inflation concerns remained in place Monday, amid speculation that the Federal Reserve may need to pick up the pace of its rate-hiking campaign to counter pricing pressure in the economy.
While the market is perhaps getting closer to stabilizing, it isn't there yet, Cardillo added, particularly ahead of key economic and earnings news due later in the week.
Economic reports due later in the week that are likely to be of particular relevance to inflation-focused investors include the read on consumer prices, both at the standard and core level, and the read on import and export prices.
After the close, Alcoa (Research) became the first Dow component to report third-quarter earnings. The aluminum producer reported slightly higher third-quarter earnings despite higher energy and raw materials costs. Last week, Alcoa warned that results would miss estimates.
Also after the close, Genentech (Research) reported improved quarterly earnings that topped forecasts due to strong sales of its cancer treatments. The biotech also boosted its fiscal-year 2005 earnings forecast.
Earnings in the third quarter are expected to grow 16.4 percent versus a year ago, according to a consensus of economists surveyed by Thomson Financial/First Call.
(Click here for complete earnings coverage.)
Tuesday brings the minutes from the most recent Federal Reserve policy-setting meeting, always a market event, as investors try to decipher what the policy makers were thinking at the last meeting, and how that might impact future rates.
Auto sector slammed
Delphi (down $0.79 to $0.33, Research) filed for bankruptcy protection over the weekend after warning for months that it was on the brink of doing so. Shares of the auto-parts supplier plunged 70.5 percent.
The fallout from Delphi could cost former parent General Motors somewhere in the neighborhood of $11 billion. GM (down $2.81 to $25.48, Research) shares lost 9.9 percent.
Big-three rivals Ford Motor (down $0.30 to $8.93, Research) and DaimlerChrysler (down $1.83 to $50.76, Research) slipped, too.
Separately, auto- and truck-parts maker Dana (down $3.15 to $6.04, Research) said Monday that it would need to restate earnings for 2004 and the first half of 2005, and delay third-quarter results because of its previously announced accounting problems. Shares fell 34 percent.
Other movers
Refco (down $12.96 to $15.60, Research) slumped 45.4 percent in active New York Stock Exchange trade. The commodities dealer said it put its CEO on leave in the midst of his involvement in a debt that could require the company to restate years of financial results.
The influential chip sector was hit hard, following a profit warning from Xilinx.
Xilinx (down $4.35 to $22.77, Research) slumped 16 percent in active Nasdaq trade after warning that sales for the second quarter would miss estimates, due to weak demand in the Asia-Pacific region, among other factors.
The Philadelphia Semiconductor (down 14.96 to 446.15, Charts) index, or the SOX, lost 3.2 percent.
Homebuilders continued to slump, with the Dow Jones Home Construction (unchanged at $856.45, Research) index losing 3.7 percent.
U.S. light crude for November delivery fell 4 cents to settle at $61.80 a barrel on the New York Mercantile Exchange, after having traded on both sides of unchanged throughout the session.
Oil stocks slipped, including Exxon Mobil (down $1.10 to $58.50, Research) and Valero Energy (down $2.66 to $105.04, Research). The Amex Oil (down 10.94 to 985.54, Charts) index lost 1.1 percent.
In addition to Exxon and GM, other big Dow decliners included Honeywell (down $0.68 to $35.87, Research), Hewlett-Packard and Caterpillar (down $1.05 to $55.57, Research).
The Dow 30 saw a few gainers, including IBM (up $0.75 to $81.25, Research), which added nearly 1 percent after Citigroup upgraded it to "buy" from "hold."
Dow retailers Wal-Mart Stores (up $0.51 to $44.54, Research) and Home Depot (up $0.22 to $38.02, Research) both gained after bullish mentions in financial weekly Barron's over the weekend.
Insurance company Lincoln National (down $1.54 to $49.19, Research) said it had agreed to buy rival Jefferson-Pilot (up $3.02 to $53.81, Research) in a $7.5 billion cash and stock deal. Lincoln National shares were little changed and Jefferson-Pilot shares added 6 percent.
Market breadth was negative and volume was light due to the Columbus Day holiday. On the New York Stock Exchange, losers beat winners eleven to five on volume of 1.63 billion shares. On the Nasdaq, decliners topped advancers nine to five on volume of 1.41 billion shares.
The Treasury bond market and banks were closed for Columbus Day.
The dollar rose versus the euro and yen.
COMEX gold rose 30 cents to $478 an ounce.
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