Wall Street Slides Ahead of Auto Sales Data

By JACK HEALY
The New York Times
Published: Jan 06, 2009

On Wall Street, the first full trading week of 2009 began with another slate of losses.

After three sessions of gains that fueled hopes for a January rebound, stock markets fell in midday trading on Monday as car companies prepared to release what are expected to be weak year-end auto sales and oil prices clawed back from five-year lows.

After 12 p.m., the Dow Jones industrial average dipped below 9,000 and was down 65 points while the broader Standard & Poor’s 500-stock index and the technology-heavy Nasdaq index were down slightly.

Shares of General Motors and the Ford Motor Company rose slightly while other automakers slipped ahead of sales announcements from a host of car companies. Soaring gas prices hurt sales of cars and trucks in the first half of 2008, and the economic downturn and frozen credit markets for car loans in the last part of the year were expected to batter sales for the end of 2008.

Shares of Apple rose after Steven P. Jobs, the computer maker’s chief executive, released a letter addressing concerns about his health that have swirled since Mr. Jobs decided not to make a keynote appearance at the annual Macworld convention. Mr. Jobs said a hormone imbalance had been “robbing” his body of necessary proteins, but he said had begun treatment and would remain at Apple’s helm as he recovered.

Despite the housing slump and restricted credit for building loans, construction spending in November was stronger than economists had expected. Spending dropped by 0.6 percent, less than an expected 1.3 percent drop, the Commerce Department reported Monday.

Overall spending was pulled down by a 4 percent decline in spending on home building, but nonresidential construction ticked up 1 percent from October.

“This is just a matter of time, though, because the lead time for construction projects is long and the credit crunch has not yet had time to make itself felt in full,” said Ian Shepherdson, chief United States economist at High Frequency Economics. Sooner or later, he said, nonresidential construction “will fall very sharply indeed.”

Crude oil prices extended their rally on Monday, rising $1.43 to $47.77 a barrel as the OPEC cartel put in place production cuts of 2.2 million barrels a day. Although oil prices are still down sharply from their July peaks of $145 a barrel, they have risen nearly 20 percent over the last week, from $40 a barrel last Monday.

In afternoon European trading, all of the major exchanges were slightly higher.

Asian markets were mostly higher. The Tokyo benchmark Nikkei 225 stock average rose 2.1 percent the Hang Seng index in Hong Kong gained 3.1 percent and the Shanghai Stock Exchange composite index 3.3 percent. The S.& P./ASX 200 in Sydney bucked the trend, falling 0.9 percent.

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