NEW YORK (AP) -- U.S. stocks started the second quarter with a thud Monday after car makers reported disappointing March sales, a possible warning about other types of spending. But a late recovery helped stocks avoid bigger losses.
Stocks tumbled in morning trading after automakers including Ford and General Motors said passenger car sales slumped last month. Auto parts and rental car companies also tumbled. Spending by shoppers is a critical part of economic growth and investors found themselves wondering if spending will keep growing as it has in recent years. Small companies slumped, as their performance is closely linked to U.S. economic growth.
While stocks recovered most of their earlier losses, the weak car sales still sent a chill through the market. Steven Ricchiuto, chief U.S. economist for Mizuho, said auto sales have been a major part of the U.S. economy recently, and if car sales fall, consumer spending would also weaken. That in turn might mean manufacturers and other companies won't open as many factories or hire as many workers.
"If we're starting to lose some of the momentum on autos, where is the momentum going to come from?" he said.
The Standard & Poor's 500 index fell as much as 18 points around midday, but finished down just 3.88 points, or 0.2 percent, at 2,358.84. The Dow Jones industrial average lost as much as 145 points but wound up with a loss of 13.01 points, or 0.1 percent, to 20,650.21. The Nasdaq composite shed 17.06 points, or 0.3 percent, to 5,894.68. The Russell 2000 index of small-company stocks gave up 16.25 points, or 1.2 percent, to 1,369.67.
Ford, Fiat Chrysler, Toyota and Honda all said their overall sales decreased in March as passenger car sales kept falling. GM reported its sales were up thanks to stronger SUV sales, but its totals weren't as good as experts expected.
Auto sales have reached all-time highs in recent years, but companies are offering more cash, incentives, and low-interest loans to draw in buyers. Investors are getting worried that companies will be stuck with vehicles they'll have to sell for big discounts.
Fiat Chrysler lost 52 cents, or 4.8 percent, to $10.41 and General Motors stock fell $1.19, or 3.4 percent, to $34.17. Ford gave up 20 cents, or 1.7 percent, to $11.44.
Five of the eight worst performers in the S&P 500 Monday came from the auto industry. Auto parts retailer O'Reilly Automotive dropped $11.15, or 4.1 percent, to $258.69. Auto retailer AutoNation shed $1.45, or 3.1 percent, to $40.84 and Goodyear Tire slid 73 cents, or 2 percent, to $35.28.
Tesla said over the weekend that its deliveries jumped 69 percent in the first quarter to a record 25,000. The electric car company's stock climbed $20.22, or 7.3 percent, to $298.52. Tesla's market capitalization rose to $48.7 billion, greater than Ford's.
Bond prices rose sharply. The yield on the 10-year Treasury note fell to 2.33 percent from 2.39 percent. When bond yields fall, interest rates also decrease, and that affected banks and financial institutions.
As investors felt less certain about the performance of the economy, they sold stocks in companies that do the best when the economy is growing quickly. Retailers, technology companies, and industrial companies fell more than the rest of the market on Monday.
The dollar sank to 110.96 yen from 111.29 yen and the euro fell to $1.0665 from $1.0684.
Benchmark U.S. crude lost 36 cents to $50.24 a barrel in New York. Brent crude, used to price international oils, slipped 41 cents to $53.12 a barrel in London.
Health care companies finished with small gains as big health insurers traded higher. Cigna added $2.90, or 2 percent, to $149.39 and Humana picked up $3.63, or 1.8 percent, to $209.77. Aetna and UnitedHealth both rose about 1 percent.
Novocure jumped after a study of its Optune device, which uses electric fields to fight cancer, appeared to improve survival for patients with aggressive brain tumors. Over the weekend the company said 13 percent of patients treated with the device as well as chemotherapy were still alive after five years, compared to 5 percent for the patients who received only chemotherapy. Many doctors are skeptical of the product, and it's costly, at $21,000 a month. Novocure stock climbed $3, or 37 percent, to $11.10.
In other energy trading, wholesale gasoline fell 1 cent to $1.69 a gallon. Heating oil slid 1 cent to $1.56 a gallon. Natural gas skidded 6 cents, or 1.9 percent, to $3.13 per 1,000 cubic feet.
The price of gold rose $2.80 to $1,254 an ounce. Silver lost 4 cents to $18.21 an ounce. Copper dropped 5 cents, or 1.8 percent, to $2.60 a pound.
France's CAC 40 slipped 0.7 percent. The German DAX sank 0.5 percent, as did the FTSE 100 of Britain. Japan's benchmark Nikkei 225 added 0.4 percent and the Kospi in South Korea rose 0.3 percent. Hong Kong's Hang Seng gained 0.5 percent.