By Halia Pavliva Nov. 3 (Bloomberg) -- Platinum fell for the first time in five sessions in New York on concerns that demand for the metal may slide further as U.S. automakers cut back. Palladium rose. Manufacturing in the U.S. contracted in October at the fastest pace in 26 years as the credit crisis deepened and buyers slashed orders. Two of the ``Big Three'' Detroit automakers, General Motors Corp. and Chrysler LLC, may combine as a freeze on car loans helped push 2008 industry sales toward a 15-year low. Most platinum consumption is for auto parts. ``We are still in a bear market for the platinum group metals so the downward pressure will continue for the foreseeable future,'' said Miguel Perez-Santalla, a sales vice president at Heraeus Precious Metals Management in New York. ``Only if auto sales improve will we see any change.'' Platinum futures for January delivery fell $3.80, or 0.5 percent, to $827.80 an ounce at 11:19 a.m. on the New York Mercantile Exchange. The metal slid 45 percent this year before today. Automakers use about 60 percent of global platinum output, according to estimates by Johnson Matthey Plc, a London-based metals trader, refiner and researcher. Carmakers put the metal in exhaust-system parts that filter out noxious gases. Palladium futures for December delivery jumped $3.40, or 1.7 percent, to $202.95 an ounce. The most-active contract dropped 47 percent this year before today. The Institute for Supply Management's factory index, a barometer of manufacturing activity, dropped to 38.9, the lowest since September 1982, from 43.5 in August, the Tempe, Arizona- based group reported today. A reading of less than 50 indicates a contraction. Hedging Dollar Decline Some investors buy precious metals priced in dollars, including platinum and palladium, to preserve value when the dollar declines. The dollar fell as much as 1.3 percent against the euro, ending two days of gains, and was trading at $1.276 per euro at 11:02 a.m. in New York. ``There are continuing talks of more rates cuts to come from around the globe in an attempt to continue to bolster economic activity,'' Perez-Santalla said in a research note earlier today. ``In the meanwhile, precious metals seem to be forming a base. With stability in commodities it should prove to be helpful for businesses in the long rung.'' The European Central Bank and the Bank of England will lower their benchmark interest rates by 50 basis points on Nov. 6, according to Bloomberg News surveys. The U.S. gross domestic product contracted at a 0.3 percent annual rate in the third quarter, the biggest decline since 2001, the Commerce Department reported last week. Auto Sales Decline Nissan Motor Co., Japan's third-largest automaker, slashed its full-year profit forecast 53 percent as a faltering U.S. economy crimped auto demand. The company's U.S. sales plunged 37 percent in September. Global sales at General Motors Corp. fell 11 percent in the third quarter, the company said on Oct. 29. Sales in North America, its largest market, tumbled 19 percent, GM said. Chrysler's sales last month fell 35 percent to 40 percent, according to industry analysts surveyed by Bloomberg News. To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net.

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