* Optimism over China stimulus plan fades
* Worries about GM's future hurt sentiment, stock plunges
* McDonald's jumps after sales exceed expectations
* Dow off 0.7 pct, S&P 500 off 1.2 pct, Nasdaq off 1.6 pct
(Updates to afternoon)
By Kristina Cooke
NEW YORK, Nov 10 (Reuters) - U.S. stocks fell on Monday,
as investors worried about the outlook for companies,
including General Motors<GM.N> and Goldman Sachs <GS.N>, given
the global economic downturn and enthusiasm for China's
deep-pocketed stimulus plan faded.
The financial sector led the way lower after Barclays
analysts said they expected Goldman Sachs to post a quarterly
loss for the first time in the company's history due to steep
equity market declines.
In another piece of worrisome news for the beleaguered
sector, the cost of rescuing American International Group Inc
<AIG.N> jumped to $150 billion after a smaller bailout failed
to stabilize the ailing insurance giant,
Dow component GM's shares, meanwhile, fell to 62-year lows
after Deutsche Bank recommended that clients sell the
automaker's shares and a number of brokerages warned that GM
and its rivals are burning through cash fast.
McDonald's Corp <MCD.N> helped the Dow fare better than
the S&P 500 and Nasdaq. The world's largest hamburger chain
said global sales at its fast-food restaurants open at least
13 months rose 8.2 percent in October, topping analysts'
targets.
Stocks worldwide initially rose after China approved a
$586 billion government spending package and said it would
adopt a "moderately easy" monetary policy. But the euphoria
swiftly fizzled as investors doubted that the steps would work
quickly enough to lessen the blow of a steep global economic
downturn.
"Talk Goldman Sachs will report a loss for the quarter is
contributing to this sell-off. It seems to be overwhelming the
longer-term positive associated with the Chinese stimulus,"
said Phil Orlando, chief equity market strategist at Federated
Investors in New York.
"China's stimulus won't work instantaneously and we're
already in a global recession," Orlando said.
The Dow Jones industrial average <> slipped 59.89
points, or 0.67 percent, to 8,883.92. The Standard & Poor's
500 Index <.SPX> dipped 10.93 points, or 1.17 percent, to
920.06. The Nasdaq Composite Index <.IXIC was down 25.72
points, or 1.56 percent, at 1,621.68.
Google <GOOG.O> shares weighed on the Nasdaq after
Barclays Capital cut its fourth-quarter revenue estimates on
the Web search leader and lowered its price target on the
stock, citing further macro weakness. Google shares fell 5.9
percent to $311.71.
Goldman Sachs shares lost 10.4 percent to $69.68 after
Barclays analysts said they expected Goldman to post a
fourth-quarter loss of $2.50 per share.
GM's stock plummeted 21.6 percent to $3.42, dragging
along rival Ford <F.N>, whose shares declined 4.5 percent to
$1.93. On Friday, both companies posted wider-than-expected
quarterly losses.
McDonald's shares rose 2.5 percent to $56.85.
Adding to the market's jitters, major electronic retailer
Circuit City <CC.N> was forced into bankruptcy just weeks
before the holiday shopping season.
China's economic stimulus involves new government spending
between now and 2010 and would focus largely on infrastructure
and social projects. For details, see [].
(Reporting by Kristina Cooke; Editing by Jan Paschal)
