* Investors fret about dimming prospects US auto rescue
* Worry about Citigroup's future mounts as stock sinks
* Jobless claims point to more labor market weakness
* Dow off 2.6 pct, S&P off 3.7 pct, Nasdaq off 2.8 pct
* For up-to-the-minute market news, please click on
STXNEWS/US
(Updates to midmorning)
By Ellis Mnyandu
NEW YORK, Nov 20 (Reuters) - U.S. stocks extended their
slide on Thursday, sending the benchmark S&P 500 index <.SPX>
to its lowest in more than six years, as the latest data showed
the economy sinking more and investors worried about possible
failures by U.S. automakers without a government bailout.
Government data showing that the number of U.S. workers
filing new claims for jobless benefits hit their highest level
in 16 years in the recent week diminished the appetite for
riskier assets even more, along with worries about the future
of Citigroup <C.N>.
Shares of the major U.S. bank, a Dow component, slid almost
15 percent to its lowest level in more than 13 years as
investors fretted about more financial sector losses, while
shares of General Motors <GM.N> plunged more than 20 percent
and Ford <F.N> slid more than 15 percent.
The worsening economic picture triggered technical breaches
by the major indexes, a move that threatened to unleash more
turmoil as the bear-market descent deepens on signs the economy
is spiraling into a deep slump. The S&P 500 fell to its lowest
level since Oct 2002, and is now 50 percent off its record high
hit in October 2007.
U.S. crude futures briefly fell below $50 a barrel for the
first time since Jan. 18, 2007.
"The decline in the oil prices is a barometer of more
economic sliding globally," said Andrew Kanaly, chairman of
Kanaly Trust Company in Houston, Texas.
"All you are left with at this point is how much redemption
and forced selling is left out there? This got one rethinking
how many times is one going to take a beating before realizing
the market isn't going to bounce."
The Dow Jones industrial average <> slid 214.49 points,
or 2.68 percent, to 7,782.79. The Standard & Poor's 500 Index
<.SPX> plunged 29.82 points, or 3.70 percent, to 776.76. The
Nasdaq Composite Index <> slumped 39.64 points, or 2.86
percent, to 1,346.78.
Citigroup shares tumbled 15.3 percent to $5.41 on the New
York Stock Exchange, where the stock earlier slid as far as
$4.77.
Shares of JPMorgan <JPM.N> , another major U.S. bank, were
a top drag on the Dow, falling more than 14 percent to $24.14.
The S&P 500 index <.GSPF> fell nearly 4 percent.
Saudi Prince Alwaleed bin Talal said he would boost his
stake in Citigroup to 5 percent. The news initially sent Citi
shares up as much as 6 percent but the boost evaporated.
The drop in oil prices pulled shares of energy companies
down, with Chevron Corp <CVX.N> shares tumbling 5 percent to
$67.18, while those Exxon Mobil Corp <XOM.N> declined to 2.6
percent to $71.43.
With Congress winding down its session, the auto makers
appeared to have made very little progress in convincing
Washington to agree to a $25 billion rescue package that the
automakers say is necessary to avert bankruptcy.
Even after two days of pleas for aid by auto executives on
Capitol Hill, the fate of General Motors <GM.N> , Ford <F.N>
and Chrysler hangs on the balance. GM's stock tumbled to $1.92
and Ford tumbled to $1.09.
The automotive executives on Wednesday predicted a
far-reaching calamity for the U.S. economy without a government
lifeline. In other economic news, factory activity in the U.S.
Mid-Atlantic region fell to another 18-year low in November.
[]
(Reporting by Ellis Mnyandu; Editing by Kenneth Barry)
