* Dow falls to September 2006 low
* GM shares tumble more than 10 percent on brokerage view
* Nasdaq falls more than 2 percent tech disappointment
* Citigroup, Merrill slump on brokerage forecast
(Updates to midmorning)
By Walker Simon
NEW YORK, June 26 (Reuters) - U.S. stocks slumped on
Thursday, with the Dow falling to its lowest level since
September 2006, on worries about losses by big banks and a
plunge in General Motors Corp's <GM.N> stock to a 53-year low.
Disappointing profit outlooks from technology companies,
also weighed on the market, briefly sending all three major
indexes down more than 2 percent.
Oil rose nearly 3 percent on supply concerns, adding to
already elevated inflation fears, while data pointed to U.S.
labor market weakness.
General Motors Corp <GM.N> slumped more than 10 percent to
the lowest price since 1955. The plunge dragged down the auto
sector as Goldman Sachs cut GM's stock to "sell," warning it
could have to raise capital and cut dividends in a brutal
slowdown for the industry.
"The worries are about the health of the economy. Is there
going to be a pickup in economic activity any time soon?" said
Bruce Zaro, chief technical strategist at Delta Global Advisors
in Boston.
The Dow Jones industrial average <> was down 228.63
points, or 1.94 percent, at 11,583.20. The Standard & Poor's
500 Index <.SPX> was down 25.36 points, or 1.92 percent, at
1,296.61. The Nasdaq Composite Index <> was down 61.52
points, or 2.56 percent, at 2,339.74.
Shares of Citigroup <C.N> and Merrill Lynch & Co. <MER.N>
fell more than 4 percent as Goldman Sachs forecast heavy
second-quarter losses and big write-downs at both companies.
Technology stocks also took a battering after BlackBerry
maker Research in Motion <RIM.TO> <RIMM.O> forecast
weaker-than-expected profit growth. It fell more than 12
percent to $125.01.
Shares of Oracle, the world's No. 3 software maker, fell 3
percent to $21.85 on its conservative outlook.
Only one of the 30 Dow components rose -- Coca-Cola Co.
<KO.N>, whose shares advanced 0.4 percent to $54.31.
The government reported the four-week average of new
jobless claims, a measure of underlying labor trends rose to
its highest since October 2005 in the aftermath of Hurricane
Katrina.
Citigroup fell 5.6 percent to $17.79; Merrill dropped 4.5
percent to $33.85 and Bank of of America <BAC.N> declined 4.8
percent to $25.34.
Crude oil prices rose $3.16 to $137.13 a barrel, reversing
direction after a more than $2 a barrel on Wednesday, helping
some energy stocks.
(Additional reporting by Kristina Cooke; Editing by Kenneth
Barry)
