US STOCKS-Economic worry hounds Wall St, Starbucks down late
* Optimism over China stimulus plan fades * Worries about GM's future hurt sentiment, stock plunges * Starbucks' shares fall 3 percent after the bell * Dow down 0.8 pct, S&P 500 off 1.3 pct, Nasdaq off 1.9 pct
(Updates close with Starbucks sliding after the bell)
NEW YORK, Nov 10 (Reuters) - U.S. stocks fell in tepid volume on Monday, as investors worried about the outlook for a raft of companies from General Motors GM.N to Goldman Sachs (GS.N) in a harsh economic environment, stifling early enthusiasm for a Chinese stimulus plan.
The financial sector led the way lower after Barclays Capital analysts said they expect Goldman Sachs to post a quarterly loss for the first time in its history due to steep equity market declines. Goldman's shares lost more than 8 percent.
Dow component GM's shares, meanwhile, fell to 62-year lows after Deutsche Bank lowered its equity value on the automaker to zero and a number of brokerages warned that GM and its rivals are burning through cash fast.
"It's ugly out there and it's not going to be over tomorrow. It's going to take some time," said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia, Pennsylvania. "Talk on the Street about Goldman's numbers, the latest analyst comments on GM -- there was just a whole lot of negative corporate news today. Investors are still really nervous."
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 fizzled fast in the United States as investors were inundated with negative headlines.
The Dow Jones industrial average .DJI fell 73.27 points, or 0.82 percent, to 8,870.54, while the Standard & Poor's 500 Index .SPX dropped 11.78 points, or 1.27 percent, to 919.21. The Nasdaq Composite Index .IXICwas down 30.66 points, or 1.86 percent, at 1,616.74.
After October's drubbing, stocks have made effectively no headway in November, and traders noted volume has been fairly light so far this month.
Trading was low on the New York Stock Exchange, with about 1.14 billion shares changing hands, well below last year's estimated daily average of roughly 1.90 billion, while on Nasdaq, about 1.71 billion shares traded, also falling short ot last year's daily average of 2.17 billion.
Also notable was the absence of a sharp last-minute sell-off, which had been a hallmark of down days during October's extreme volatility. In fact, major benchmarks cut some of their losses heading into the close on Monday.
But the grim news continued after hours, with shares of coffee chain Starbucks Corp (SBUX.O) falling more than 3 percent after its quarterly results fell short of expectations.
BIGGER BAILOUT
Another piece of worrisome news for the beleaguered financial sector that darkened Monday's session was that 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.
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 3.7 percent to $318.78.
Adding to the market's jitters, major electronic retailer Circuit City CC.N was forced into bankruptcy just weeks before the holiday shopping season.
Goldman Sachs shares lost 8.5 percent to $71.21 on the NYSE after Barclays analysts said they expected the bank to post a fourth-quarter loss of $2.50 per share.
GM's stock plummeted 22.9 percent to $3.36, 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.
China's economic stimulus involves new government spending between now and 2010 and would focus largely on infrastructure and social projects. For details, see [ID:nN09395080].
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.
McDonald's shares rose 1.8 percent to $56.48.
The U.S. bond market closed early on Monday, ahead of the Veterans Day holiday when it will be shut. The U.S. stock market will be open as normal on Tuesday.
Declining stocks outnumbered advancing ones on the NYSE by more than 2 to 1 and on Nasdaq by about 5 to 2. (Reporting by Kristina Cooke; Editing by Jan Paschal)
