Dec. 3 - Summary: Stocks slide for a third day with strong auto sales offset by holiday shopping worries; Detroit gets OK for historic bankruptcy; Tesla stock energized after deep November dive. Conway G. Gittens reports.
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U.S. stocks head in reverse despite surprisingly strong auto sales.
The Dow and the S&P 500 are down three sessions in a row, while the Nasdaq is down two.
Automakers saw stellar sales in November, with Black Friday discounts providing an extra boost. Pickup trucks did the heavy lifting as annualized sales hit their second highest point of the year. But analysts doubt that kind of demand can extend into 2014. Those concerns overshadowed the stronger-than-expected sales figures, dragging shares of General Motors and Ford lower.
While Detroit's Big Three enjoy a resurgence, the rest of the city is still in a slump. The City of Detroit is now the biggest municipal bankruptcy in U.S. history following a court ruling. Of particular note, city pension and retirement benefits are in jeopardy.
Emergency Manager Kevyn Orr:
SOUNDBITE: KEVYN ORR, DETROIT'S STATE-APPOINTED EMERGENCY MANAGER (ENGLISH) SAYING:
"While we are very pleased, we remain very concerned about the need to adjust the city's debt, to improve its level of services for its citizens and to also, prepare for the city to exit this receivership in a fashion that restores democracy to the city."
Tesla Motors named as a top pick by Morgan Stanley. And Telsa says German regulators ended a probe of Model S fires concluding: "no manufacturer-related defects could be found." The U.S. National Highway Traffic Safety Administration, however, has yet to reveal its findings. Shares of Tesla surged 16 percent after taking a beating in November.
More clues on the start of the crucial shopping season. Data from ShopperTrak suggest retailers actually hurt themselves by earlier openings and deeper discounts ahead of Black Friday. According to findings, early shoppers took advantage of deals but didn't come back and that made for weak Black Friday weekend comparisons.
Meanwhile, selling pressure was intense in Europe as investors fret the Federal Reserve's easy money policy is nearing an end.
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