U.S. Stocks Expand Losses

Wall Street was scuffling Monday afternoon, as cautious investors shied away from equity markets with the future of the U.S. auto industry in flux and the Federal Reserve's monetary policy committee gathering for a two-day meeting.

Investors are still waiting to hear if the Treasury will use Troubled Asset Relief Program funds to aid Detroit, after a $14.0 billion loan package for the car companies was shot down by the Senate. Judging by trading in the shares of publicly traded U.S. automakers General Motors (nyse: GM - news - people ) and Ford Motor (nyse: F - news - people ), investors don't expect the White House to allow them to fail. GM shares were up 19 cents, or 4.8%, to $4.13 Monday; Ford gained 9 cents, or 3.0%, to $3.13. Chrysler, which would have received $4.0 billion in loans under the rejected plan, is privately held.

The struggles facing the industry are not limited to the domestic automakers either. Japan's Toyota Motor (nyse: TM - news - people ) is said to be halting work on a Mississippi plant designed to build its hybrid Prius, once the current phase of production is completed, according to TradeTheNews.com. American depositary receipts of Toyota, which has already pumped $300.0 million at the Mississippi plant, were up $2.34, or 3.7%, to $65.54.

Aside from the positive automaker stocks, it was a red day on Wall Street. The Dow was down 83 points, or 1.0%, to 8,546; the S&P 500 lost 13 points, or 1.5%, to 866; and the Nasdaq fell 34 points, or 2.2%, to 1,507. Investors also had their eyes on the Fed, with expectations the central bank will take its benchmark interest rate down another half point, to 0.5%.

The move would be mostly symbolic, since the effective fed funds rate has been below the 0.5% threshold since October. Market watchers will be more interested in the statement accompanying the decision, which may hint at other methods of easing monetary policy beyond cutting rates, such as investments in Treasury bonds or expanded purchases of Fannie Mae (nyse: FNM - news - people ) and Freddie Mac (nyse: FRE - news - people ) debt.

Treasury yields inched lower Monday, as investors moved out of stocks and into the perceived safety of government debt. The two-year note returned 0.75%, down from 0.77% Friday, while the 10-year note offered 2.54%, from 2.57%. The iShares Lehman 10-20 Year Treasury Bond Fund (nyse: TLH - news - people ), which tracks a range of long-term bonds, was up 50 cents, or 0.4%, to $118.37.

Earnings will come back into focus this week, with reports from Wall Street survivors Goldman Sachs (nyse: GS - news - people ) and Morgan Stanley (nyse: MS - news - people ) on the agenda. Goldman, which is expected to report the first quarterly loss in its 10-year history as a public company Tuesday, was down $1.40, or 2.1%, to $66.34, in afternoon trading. Morgan Stanley lost 27 cents, or 2.0%, to $13.58, ahead of its report Wednesday.

Oil prices reversed course from early gains, as traders weigh the impact of an expected production cut from the Organization of Petroleum Exporting Countries. The cartel will gather in Algeria Wednesday, and is expected to slash output by at least 2.0 million barrels. Crude, up more than $3.00 earlier in the day, fell $1.33, to $44.95 a barrel.