US stocks drop as carmakers seek bail-out, oil price hits new lows
Wall Street stock indices lost ground Thursday, as US carmakers asked Congress for a federal bail-out and oil prices fell to their lowest level in nearly four years, dpa reported.
Shares of General Motors Corp plunged 16 per cent as the company's plea alongside Ford Motor Co and Chrysler LLC for emergency cash to keep the US automotive industry afloat was met with skepticism by US legislators.
Union chief Ron Gettelfinger of the United Auto Workers said that GM may not survive December, while media reports said that GM was already working on plans to file for bankruptcy protection.
On the New York commodity market, crude oil dropped below 44 dollars per barrel for the first time since January 2005, after peaking at 145 dollars per barrel just six months ago.
Merril Lynch & Co predicted that oil will fall to 25 dollars per barrel. Shares of Exxon Mobil Corp, the world's largest oil company, dropped 3.4 per cent.
The Dow Jones Industrial Average tumbled 215.45 points, or 2.51 per cent, to 8,376.24. The Standard & Poor's 500 fell 25.52 points, or 2.93 per cent, to 845.22. The technology-heavy Nasdaq Composite Index plunged 46.82 points, or 3.14 per cent, to 1,445.56.
The US currency fell Thursday to 78.40 euro cents from 78.72 euro cents on Wednesday. The dollar dropped against the Japanese currency to 92.2 yen from 93.32 yen on Wednesday.