By Michael Patterson and Elizabeth Stanton
Oct. 24 (Bloomberg) -- U.S. stock-index futures plunged by their daily limits after slumping earnings at automakers and technology companies spurred concern the financial crisis has infected the broader economy.
General Motors Corp. declined 13 percent and Ford Motor Co. lost 10 percent after Toyota Motor Corp., the world's second- largest automaker, reported its first sales decline in seven years. Apple Inc. fell 8.4 percent as Samsung Electronics Co., Asia's biggest maker of chips and mobile phones, had its steepest profit drop in more than three years. Exxon Mobil Corp. lost 8.2 percent as oil and gasoline prices retreated.
``It's the spillover of the banking crisis into real economies around the world,'' said Michael Mullaney, a Boston- based money manager at Fiduciary Trust Co., which oversees $10 billion. ``Everything's going down hard. Diversification is not working right now, that's what it amounts to. We're throwing everything out.''
Standard & Poor's 500 Index futures expiring in December fell 60 points, or 6.6 percent, to 855.20 as of 9:11 a.m. in New York. The SPDR Trust Series 1, an exchange-traded fund tracking the S&P 500 that was not subject to the trading limit, slumped 8.9 percent to $83.54. Dow futures dropped 550, or 6.3 percent, to 8,224, while Nasdaq-100 Index futures retreated 85, or 6.8 percent, to 1,168.50.
`Limit Down'
S&P 500 futures will not trade below 855.20 until U.S. exchanges open for regular trading at 9:30 a.m. New York time, said Jeremy Hughes, a London-based spokesman for the Chicago Mercantile Exchange. Dow Average futures won't trade below 8,224, while Nasdaq-100 futures won't fall below 1,168.50, he said. The ``limit down'' suspension allows both contracts to trade above those levels, he said.
The New York Stock Exchange plans to open for U.S. trading today, spokesman Richard Adamonis said.
Under so-called circuit-breaker rules, the NYSE will halt trading for 30 minutes if the Dow drops 1,100 points before 2 p.m. A 2,200-point decline before 1 p.m. will halt trading for two hours, while a 3,350-point slide will close trading for the remainder of the day.
Today is the 79th anniversary of ``Black Thursday,'' the first of three sell-offs on the New York Stock Exchange that erased a quarter of the Dow average's value over five days.
Some investors speculated that today's declines were being exacerbated by hedge funds facing margin calls, or demands to repay borrowed money used to buy shares.
`Forced Selling'
``This must be forced selling, probably hedge funds,'' said Nick Sargen, chief officer at Fort Washington Investment Advisors, which oversees $30 billion in Cincinnati. ``A rational investor, and I emphasize rational, wouldn't be selling now.''
The MSCI All-Country World Index, a gauge of equity markets in 48 developed and emerging nations, has tumbled 47 percent this year as a freeze in credit markets sparked by $659 billion of asset writedowns and credit losses at banks raised concern that the global economy is headed for a recession. About $30 trillion of market value has been erased from global equities in 2008, according to data compiled by Bloomberg.
Europe's Dow Jones Stoxx 600 Index slumped 7.4 percent today and the MSCI Asia Pacific Index sank 5.2 percent.
The S&P 500 has declined 3.5 percent this week, while the Dow average has dropped 1.8 percent. The Nasdaq Composite Index is down 6.3 percent.
GM, the biggest U.S. automaker, dropped to $5.30 today and Ford, the second-largest, declined to $1.81.
GM reiterated today that bankruptcy is ``not an option'' for the company. Speculation regarding GM's financial stability is unfounded, spokesman Tony Cervone said in an interview.
Toyota Sales
Toyota sold about 2.236 million vehicles worldwide in the three months ended Sept. 30, down 4.3 percent from 2.336 million a year earlier. GM will release its third-quarter sales figure on Oct. 29.
Volvo AB, the world's second-largest maker of heavy trucks, cut its industry growth outlook for this year, and PSA Peugeot Citroen, Europe's second-biggest carmaker, cut its full-year targets.
Apple, the maker of iPhones and iPods, dropped $8.21 to $90.02. Intel Corp., the world's largest chipmaker, declined 6.6 percent to $13.55. Samsung's profit tumbled as oversupply drove down prices of semiconductors.
Earnings at the 200 companies in the S&P 500 that reported third-quarter results so far dropped by an average of 23 percent, trailing analysts' expectations by 1.6 percent, according to data compiled by Bloomberg.
GE Declines
General Electric Co., the economic bellwether whose products range from power-plant turbines to locomotives, dropped 5.9 percent to $17.70. The company said it plans to use the Federal Reserve's short-term funding facility when it starts next week.
American International Group Inc. declined 14 percent to $1.81. The insurer said it has used $90.3 billion of a U.S. government credit line since it was bailed out last month, an amount that exceeds the size of the original loan meant to save the company.
Microsoft Corp. retreated 6.1 percent to $20.96 even as the world's largest software maker reported profit and sales that beat analysts' projections.
Exxon, Chevron
Exxon, the biggest U.S. oil company, declined to $65.86. Chevron Corp., the second-largest, lost $5.79 to $64.60.
Crude oil lost 6.9 percent to $63.18, copper dropped 7.6 percent and corn lost 4.2 percent. An S&P GSCI index of 24 raw materials has dropped 35 percent since September, poised for a record quarterly decline.
The U.K.'s FTSE 100 Index dropped 7.4 percent after the economy shrank for the first time since 1992. South Korea's Kospi Index sank 11 percent as the country's economy grew at the slowest pace in four years. Russia's Micex Stock Exchange suspended trading until next week.
The yen climbed to a 13-year high against the dollar as the prospect of a global recession prompted investors to dump higher-yielding assets funded in Japan. The dollar rose to a two-year high versus the euro.
To contact the reporters on this story: Michael Patterson in London at mpatterson10@bloomberg.net; Elizabeth Stanton in New York at estanton@bloomberg.net
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