Dow tumbles over 200 points
Selling picks up as financials come under pressure, oil nears $100 a barrel and General Motors suffers a big loss.
NEW YORK (CNNMoney.com) -- The Dow industrials tumbled over 250 points in midday trading Wednesday as investors juggled a host of worries, including near-$100 oil prices, bleak results from General Motors and more weakness from the financial sector.
The Dow Jones Industrial average (Charts) had fallen 250 points, or about 1.8 percent, with less than 3 hours remaining in the session.
Stocks retreated at the start after Dow component GM reported a bigger-than-expected loss. The automaker before the opening bell reported a $39 billion charge related to the writedown of tax credits for losses over the past three years, sending GM (Charts, Fortune 500) shares down over 5 percent.
All 30 Dow components were lower.
Also weighing on stocks at midday were the financials. The AMEX Securities Broker/Dealer index (Charts) fell nearly 3.3 percent, while shares of Citigroup (Charts, Fortune 500) continued their recent decline, falling over 2 percent. Morgan Stanley (Charts, Fortune 500) stock lost about 6 percent while Goldman Sachs (Charts, Fortune 500) fell over 3 percent.
Stocks have been in a fragile condition after the Dow industrials plunged 362 points last week on worries that more losses may be forthcoming from Wall Street as a result of this summer's credit market crisis.
"Once financials stop going down then market is going to run back around," said Matt Kelmon, president and portfolio manager at the Kelmoore Strategy Funds.
Also in focus for Wall Street were oil prices, which soared to an all-time trading high of $98.62 a barrel. But a run-up towards $100 a barrel stalled after the weekly U.S. inventory report revealed that supplies fell less than expected.
Light, sweet crude for December fell 87 cents to $95.83 a barrel on the New York Mercantile Exchange.
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 $13.40 to $836.80 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.