The Labor Department said wholesale prices sank in November for the fourth straight month, raising deflation fears. The producer price Index fell a greater-than-expected 2.2% as prices for gasoline and other energy prices retreated. That followed a record 2.8% drop in October.
Businesses also slashed inventories in October by the largest amount in five years. The Commerce Department said businesses cut what was on shelves and back lots by 0.6%, triple the 0.2% decline economists expected.
Next week's readings include the consumer price index and housing starts for November.
The week also brings quarterly results from Wall Street's brokerages, which have been badly hurt by the stock market's tumble from its October 2007 highs, the slowdown in the economy and the freeze-up in the credit markets.
GM ended down 18 cents, or 4.4%, at $3.94 after declining as much as 37% in the session. Ford rose 14 cents, or 4.8%, to $3.04. Chrysler isn't publicly traded.
But even a potential lifeline for Detroit couldn't ease all of the concerns about job losses. Bank of America said late Thursday it expected to cut as many as 35,000 jobs over the next three years, including some from investment bank Merrill Lynch, which it agreed to buy in September. Bank of America rose 2 cents to $14.93.
Investors grappled with further prospects of diminished confidence in Wall Street. Late Thursday, Wall Street veteran Bernard Madoff was arrested on a securities fraud charge. Madoff, who 18 years ago was chairman of the Nasdaq stock market, was accused of running a phony investment business that lost at least $50 billion and that he called a "giant Ponzi scheme," prosecutors said.
"It's not a happy day when you see a $50 billion fraud," said Ken Mayland, president of research firm ClearView Economics. "Things like that will just erode the public's confidence in the market."
Overseas, Japan's Nikkei stock average fell 5.56%. Britain's FTSE 100 fell 2.47%, Germany's DAX index slid 2.18%, and France's CAC-40 declined 2.80%.