Stocks ended lower Tuesday, as a quick mood booster from an upbeat consumer sentiment reading wore off, and the drag of GM and financials set in.
The Dow Jones Industrial Average fell for a fifth straight day, shedding 100.28, or 1.2 percent, to close at 8419.49. It was the blue-chip index's longest string of declines since the eight-day losing streak ending Oct. 10.
The S&P 500 index lost 1 percent and the Nasdaq shed 0.7 percent.
Volume was extremely light again today ahead of Wednesday's shortened trading session and Thursday's Christmas holiday. Less than 1 billion shares traded hands on the New York Stock Exchange — the daily average is about 1.9 billion.
In its third and final reading on third-quarter GDP, the Commerce Department held its estimate at minus-0.5 percent. Economists expect that the economy deterioriated further in the fourth quarter, projecting a decline of as much as 6 percent.
>> By the Numbers: Where the Economy Is Growing
Stocks are almost guaranteed to log their worst year since the 1930s, though they'll go out on a soft note, not a cymbal-clashing crescendo, as volatility subsides. The CBOE Volatility index has plunged to numbers it hasn't seen since late September, shortly after the collapse of Lehman Brothers.
And, it showed in consumers' mood: Sentiment rose to 60.1in December from an upwardly revised 59.1 in the prior month, according to a University of Michigan and Reuters poll. November was initially pegged at 55.3.
News on the housing market was, not surprisingly gloomy: New-home sales slowed to the slowest pace since 1991, falling 2.9 percent to an annual rate of 407,000 in November. It was lower than the 420,000 rate economists had expected, as was the downward revision to the prior month. Still, the median-sale price rose.
Meanwhile, the pace of existing-home sales plunged a record 8.6 percent to a 4.49-million-unit rate last month, and the median home price fell for a fifth straight month.
Some value in stocks may emerge next yeardespite a "disaster" first half for the economy, as mining stocks, commodities and emerging markets are likely to stage a rebound, well-known bear Marc Faber, editor of the Gloom, Boom and Doom Report, told CNBC.
General Motors shares tumbled 15 percent after Standard & Poor's Ratings Services and Moody's Investors Service downgraded ratings on Chrysler and Ford . S&P said it believes "the bankruptcy risk remains high" for GM and Chrysler, as well as for Ford Motor, for next year.
GM has lost a third of its value since the auto bailout was announced on Friday.
Financials rounded out the top drags on the Dow, with Bank of America and Citigroup off 5.8 percent and 3.4 percent, respectively.
Shares of Unisys jumped after the IT-services company said late Monday that it would cut 1,300 jobs and suspend matching contributions to its U.S. 401(k) plan, resulting in cost-savings of $225 million.
Shares of CIT Group rose 1.9 percent after the commercial-finance company won preliminary approval to receive $2.33 billion from the government's $700 billion bailout program.
Alcoa advanced 3.7 percent after the aluminum maker agreed to swap a stake in a Swedish extrusion business for Orkla's interest in the Elkem Aluminum smelting business, bringing its global smelting capacity to more than 4.7 million metric tons and becoming the world's largest aluminum producer.
In a sign of the season, American Greetings shares tumbled 35 percent after the greeting-card company reported a loss for the third quarter and said it couldn't provide an outlook, given the tough economic conditions. S&P is considering cutting its credit rating on the card maker.
Retail stocks declined after a report showed the lowest shopper turnout in six years this past weekend. Macy's shed more than 6 percent, JCPenney lost 3.3 percent and even Wal-Mart , the low-priced star of the season, skidded 1.2 percent.
>> Track how the season is shaping up for retailers at CNBC's Holiday Central.
Coming Up:
WEDNESDAY: Weekly mortgage applications; durable-goods orders; weekly jobless claims; personal income/spending; weekly crude and nat-gas inventories; U.S. financial markets close at 1pm
THURSDAY: All U.S. financial markets closed for Christmas holiday
Send comments to cindy.perman@nbcuni.com.
