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Stocks slide as weaker auto sales trouble the market

Specialists James Denaro, left, and Mario Picone, work

Specialists James Denaro, left, and Mario Picone, work on the floor of the New York Stock Exchange, Thursday, March 30, 2017. Credit: AP

U.S. stocks started the second quarter with a thud Monday after car makers reported disappointing March sales, a possible warning about other types of spending. But a late recovery helped stocks avoid bigger losses.

Stocks tumbled in morning trading after automakers including Ford and General Motors said passenger car sales slumped last month. Auto parts and rental car companies also tumbled. Spending by shoppers is a critical part of economic growth and investors found themselves wondering if spending will keep growing as it has in recent years. Small companies slumped, as their performance is closely linked to U.S. economic growth.

Steven Ricchiuto, chief U.S. economist for Mizuho, said if car sales fell, consumer spending would also weaken.

“If we’re starting to lose some of the momentum on autos, where is the momentum going to come from?” he said.

The Standard & Poor’s 500 index fell as much as 18 points around midday, but finished down just 3.88 points, or 0.2 percent, at 2,358.84. The Dow Jones industrial average lost as much as 145 points but wound up with a loss of 13.01 points, or 0.1 percent, to 20,650.21. The Nasdaq composite shed 17.06 points, or 0.3 percent, to 5,894.68. The Russell 2000 index of small-company stocks gave up 16.25 points, or 1.2 percent, to 1,369.67.

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