Stocks keep selling off on GM, oil

NEW YORK (CNNMoney.com) -- Stocks extended early losses Wednesday as sky-high oil prices, continued declines in the dollar and dismal results from the automaker General Motors troubled already skittish investors.

The Dow Jones Industrial average (Charts) fell 140 points, or 1.03 percent, just over two hours into the session.

The broader S&P 500 index (Charts) fell 1.15 percent, while the tech-laden Nasdaq (Charts) lost 1.09 percent.

Dow component GM suffered a bigger-than-expected loss of $1.6 billion, the automaker reported before the opening bell, hurt by a $39 billion charge related to the writedown of tax credits for losses over the last three years. The news sent GM (Charts, Fortune 500) shares nearly 5 percent lower on the New York Stock Exchange.

Among individual issues, 27 of 30 Dow components were lower in morning trade.

Also in focus for Wall Street were oil prices, which soared to an all-time trading high of $98.62 a barrel.

Crude prices remained higher from the previous session, but a run-up towards $100 a barrel stalled after the weekly U.S. inventory report revealed that stocks fall less than expected.

Light, sweet crude for December gained 78 cents to $97.48 a barrel on the New York Mercantile Exchange.

"$100 a barrel [oil] is psychological level that is scaring people this morning," said Matt Kelmon, president and portfolio manager at the Kelmoore Strategy Funds.

Helping to lift oil prices was the battered dollar, which continued to slide to a new record low against the euro. The euro broke through the $1.47 barrier for the first time ever against the greenback, while the dollar also retreated against the yen.

Gold prices also continued to head higher, nearing the all-time high of $850 an ounce last reached in January 1980. COMEX gold for December gained $14.60 to $838 an ounce.

In other earnings news, Time Warner (Charts, Fortune 500), the world's largest media company, reported improved revenue that beat forecasts as it reaffirmed its 2007 outlook. It also announced that its America Online unit was making an acquisition. Time Warner is the parent of CNNMoney.com.

And GM rival Toyota Motor (Charts), which had been hit by sluggish sales in its two most important markets, Japan and the United States, nevertheless reported an 11 percent increase in profits and it raised its earnings forecast for the full year.

Companies scheduled to report quarterly earnings after the markets close Wednesday include the world's largest insurer, American International Group Inc. (Charts, Fortune 500), and computer network giant Cisco Systems (Charts, Fortune 500).

On the economic front, the Labor Department reported that worker productivity grew at its fastest rate in four years in the July-September quarter. At the same time, wage pressures and unit labor costs fell.

Investors will also be closely listening to remarks to be delivered Wednesday by a number of Federal Reserve officials, including Atlanta Fed President Dennis Lockhart and St. Louis Fed President William Poole.

Overseas, Asian markets finished mostly higher, while major European indices were mixed in afternoon trading.

Treasury prices gained, lowering the yield on the benchmark 10-year note to 4.36 percent, from 4.37 percent late Tuesday.