Stocks closed sharply lower as investors' concerns about the economy intensified after a major credit ratings agency lowered its outlook...
NEW YORK — Stocks closed sharply lower as investors’ concerns about the economy intensified after a major credit ratings agency lowered its outlook on the financial and industrial powerhouse General Electric.
The Dow Jones industrial average ended down 219.35, or 2.5 percent, at 8,604.99. Broader market indexes were also lower. The Standard & Poor’s 500 index was off 19.08, or 2.1 percent, at 885.34, and the technology-heavy Nasdaq composite index was down 26.94, or 1.7 percent, at 1,552.37.
Stocks had moved within a narrow trading range for much of the session, as investors sifted through a number of varying signs about the economy, including more layoffs and dismal earnings forecasts.
But Wall Street retreated in late trading as a negative outlook from Standard & Poor’s on GE added further pressure on the market.
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Standard & Poor’s Ratings Service lowered its outlook for GE and its GE Capital finance arm to negative from stable. The ratings agency affirmed their Triple-A ratings, but said there is a one-in-three chance they could lose them because of the ongoing financial struggles at GE Capital.
Oil prices falling below $37 a barrel also rattled investors and sent energy stocks lower. Oil prices have been on a downward march since reaching a high of near $150 a barrel in July.
“The fear is that if oil does fall down to $25 or $30 a barrel, that could indicate that the economy is even weaker than market perception and that obviously is negative,” said Peter Cardillo, chief market economist for Avalon Partners.