CORRECT: U.S. stocks sink; GM falls nearly 11%
Brokers no longer 'attractive,' says Goldman Sachs; oil tops $140 a barrel
Updating an earlier version to correct the number of trading sessions left in June.
NEW YORK (MarketWatch) -- U.S. stocks fell sharply Thursday with the blue-chip index enduring its worst June so far since 1930, and plunging to its lowest finish since Sept. 11, 2006, after getting slammed hard as crude soared to new highs and Goldman Sachs disparaged U.S. brokers and advised selling General Motors Corp.
"We're going to move in the opposite direction of oil, and General Motors is going to go out of business, at least according to Goldman Sachs," said Art Hogan, chief market strategist at Jefferies & Co.
The Dow Jones Industrial Average ($INDU![]()
$INDU) tumbled 358.41 points, or 3%, to 11,453.42, leaving it down nearly 1,200 points, or 9.4%, for the month, with two trading days yet to go. As things stand, the month is the worst June so far since 1930 when the index declined 17.72%.
Dow Jones Industrial Average
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Video: Markets Are Ugly, For Now
The Dow's at a new low for 2008 and the S&P is below 1,300, but Avalon Partners' market economist Peter Cardillo says the latest indicators along with earnings news will overcome ongoing concerns, stock downgrades and record-high commodity prices.
Cautious outlooks from Research In Motion Ltd., Oracle Corp. and Nike Inc. added to the gloom.
General Motors (GM![]()
GM) weighed most heavily on the blue chips, down 10.8%, after Goldman Sachs told clients to unload their positions in the face of the deteriorating automotive climate. See full story.
General Motors Corporation
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All of the Dow's 30 components closed in negative territory.
"The real problem is even though [the] Fed attempted to be more hawkish, it was not supportive enough of the dollar," Hogan said.
Crude-oil futures climbed to new heights, as weakness in the U.S. dollar, influenced by the Federal Reserve's decision to stand pat on interest rates, sent prices past $140 a barrel.
Crude for August delivery reached a high of $140.39 a barrel in electronic trading on Globex. The contract closed at a record $139.64 on the New York mercantile Exchange, up $5.09, or 3.8%, for the session after trading as high as $140. Read Futures Movers.
"One thing is for certain, if crude continues to rally, stocks are dead," said Dale Doelling, chief market technician at Trends In Commodities.
"If stocks have another day like this tomorrow, then the fallout next week could include government intervention in the markets," said Doelling.
The S&P 500 Index ($SPX![]()
$SPX) fell 38.82 points, or 2.9%, to 1,283.15, with all 10 of the index's industry groups losing ground.
S&P 500 Index
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Financials led sector declines, off 4.1%, followed by industrials, down 3.7%, and consumer discretionary, which declined 3.5%.
The Nasdaq Composite Index (COMP![]()
COMP) shed 79.89 points, or 3.3%, to 2,321.37.
Nasdaq Composite Index
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Volume on the New York Stock Exchange topped 1.5 billion, and declining stocks outdid those advancing more than 5 to 1. On the Nasdaq, nearly 998 million shares traded, and decliners raced beyond advancers 11 to 3.
Numbers game
The indexes furthered their losses as government data illustrated ongoing weakness in the labor market. Read Economic Report.
In addition, there was a 1% annualized increase in gross domestic product in the first quarter, slightly better than forecast. See full story.
"GDP and existing-home sales were stronger than expected, but jobless claims and the help-wanted index deteriorated, pointing to a weak non-farm payrolls report next Thursday," according to Lien.
U.S. stocks ended Wednesday with moderate gains after the Federal Reserve held interest rates at 2% and took a step toward preparing the market for rate hikes down the road. Read The Fed.
On the housing front, builder Lennar Corp. (LEN![]()
LEN) narrowed its quarterly loss but said housing-market conditions will deteriorate.
Lennar Corporation
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"I am asked regularly as to whether or not we are at the bottom, and I feel overall that we are not there yet," said Stuart Miller, Lennar's chief executive, in a conference call See full story.
Goldman Sachs cut its rating on U.S. brokers to neutral from attractive, and put Citigroup Inc. (C![]()
C) on its conviction sell list. Read Ratings Game.
Citigroup, Inc
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Research In Motion (RIMM![]()
RIMM) tumbled 13.3% after it reported doubling its revenue and earnings in its first quarter, but also signaled its plan to ramp up spending to sustain growth. Read more.
Research in Motion Limited
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Nike (NKE![]()
NKE) reported a 12% profit rise for the fourth quarter to May 31 on Europe and Asian growth, but noted that U.S. orders were flat.
NIKE, Inc
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Oracle (ORCL![]()
ORCL) dropped 5% after it said its fiscal fourth-quarter net rose 27% but issued profit guidance for the first quarter at the low end of analyst expectations. Read more.
Oracle Corporation
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Separately, a report in The Wall Street Journal said that Anheuser-Busch Cos. (BUD![]()
BUD) will formally reject InBev's $46 billion takeover offer and announce a plan to shed its theme-park division.
Anheuser-Busch Companies, Inc
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In Asia, the Nikkei 225 fell marginally, the Tokyo index's sixth straight loss. Read Asia Markets.
The FTSE 100 closed down 2.6% in London. Read London Markets. 
Kate Gibson is a reporter for MarketWatch, based in New York.
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