NEW YORK - Wall Street resumed its sell-off Wednesday after oil hit a record high and a bearish analyst report renewed concerns that General Motors Corp. could run out of cash.
The stock market’s pullback, which accelerated in the final hours of the week’s last full trading session, left the Dow Jones industrial average officially in bear market territory, with the blue chips having fallen more than 20 percent from their October highs.
Oil prices surged to records above $144 a barrel as the government reported a bigger-than-expected drop in U.S. supplies and as investors worried about tensions in the Middle East.
Fears that GM could go so far as to declare bankruptcy only added to investors’ unease. The stock closed below the $10 mark for the first time since September 1954, when Dwight Eisenhower was president. Investors shrugged off better-than-expected sales figures from June and fretted about the company’s cash needs.
The Dow fell 166.75, or 1.46 percent, to 11,215.51, the lowest close since August 2006. It now stands 20.82 percent below its Oct. 9, 2007 record of 14,164.53. The last bear market ended in October 2002.
Broader stock indicators also posted big losses after showing gains for much of the morning. The Standard & Poor’s 500 index fell 23.39, or 1.82 percent, to 1,261.52, while the technology-laden Nasdaq composite index fell 53.51, or 2.32 percent, to 2,251.46. The S&P is just shy of the 20 percent pullback that signals a bear market. While the Nasdaq is also in bear territory, it hit that mark in March, moved higher and has now returned to a bear level.
Bond prices rose as investors exited stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.96 percent from 4.01 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices rose.
Wall Street is worried that rising energy prices are causing consumers to pare their spending in other areas.