U.S. Stocks Decline After Walgreen's Results, Toyota's Forecast

NEW YORK (MarketWatch) -- U.S. stocks extended losses Monday, with the consumer-discretionary and energy sectors hit hardest after Walgreen Co., the nation's largest drugstore chain, reported disappointing results and Toyota Motor Corp. forecast a loss for the year.

"If Toyota is going to keep having trouble, and they're talking about laying off workers and cutting back sales, how are the domestic automakers going to stay afloat?" asked Craig Rappaport, a wealth manager with Janney Montgomery Scott. .

The Dow Jones Industrial Average fell 128.71 points, or 1.5%, to 8,450.4, with 27 of its 30 components posting afternoon declines fronted by General Motors Corp. , shares of which surrendered 17.8%.

Shares of other automakers also tumbled, with Ford Motor Co. sliding 11.9% and the U.S.-listed shares of Japanese giant Toyota declining 5.5%.

Toyota forecast an operating loss for the current year, which would be a first for the Japanese automaker since World War II. Toyota blamed a slump in global demand and a sharp appreciation in the yen against other currencies.

The S&P 500 Index fell 23.33 points, or 2.6%, to 864.55, with energy, consumer discretionary and information technology pacing the sectors in retreat. All of the index's 10 industry groups slipped into the red.

Under pressure among consumer-discretionary shares, Jones Apparel Group fell 17.7%. .

Shares of Walgreen declined 5.5%. The company reported first-quarter profit fell 10%.

Internet-tracking firm comScore Inc. said that spending by online shoppers fell 1% last week, with last-minute deals for free shipping before the holidays seemingly not enough to spur Web sales. .

Utilities fared the best in afternoon trading, led by Pinnacle West Capital Corp. , up 1.8%.

Financial stocks also faltered as investors assessed a report that commercial real-estate developers are seeking to tap into federal funds. .

The technology-laden Nasdaq Composite Index fell 50.21 points, or 3.3%, to 1,514.11 with tech stocks dipping even as shares of Palm Inc. jumped 17.3% on news the smart-phone maker would get an additional $100 million in private-equity investment.

Light trade

Volume on the New York Stock Exchange neared 652 million, and decliners outpaced advancers more than 3 to 1. On the Nasdaq, 380 million shares traded, and decliners offset advancers, also by a ratio of more than 3 to 1.

Crude futures erased earlier gains, with demand concerns outweighing thinking that the Organization of Petroleum Exporting Countries might further cut cartel members' production quotas. Crude for February delivery was down $2.50 at $39.86 a barrel on the New York Mercantile Exchange. .

Gold futures rose for the first session in three, with gold for February delivery closing up $9.80 at $847.20 an ounce. .

Treasury prices fell, sending yields higher for a second straight session, after the government held the first of two record-size auctions of short-term securities. .

In international markets, Japan's Nikkei 225 Average rose 1.6%, while the U.K.'s FTSE 100 index put in a flattish performance.

On Friday, U.S. stocks pulled mostly higher for another week after the White House stepped in to rescue automakers.

The Dow industrials closed at 8,579.11, off 25.88 points, or 0.3%, to finish the week down 0.3%.

The S&P 500 advanced 2.32 points, or 0.3%, to end at 887.6, up 0.9% on the week. The Nasdaq rose 11.95 points, or 0.8%, to 1,564.32, giving it a 1.5% weekly gain.

By Kate Gibson