By Lynn Thomasson Nov. 10 (Bloomberg) -- Most U.S. stocks dropped, erasing earlier gains, as analysts predicted that Goldman Sachs Group Inc. will post its first quarterly loss and that Google Inc.'s sales will be hurt by the slowing economy. Goldman slumped as much as 8.2 percent after Barclays PLC said the rout in stock markets has damaged the investment bank's private-equity business. General Motors Corp., which last week said it may run out of cash, plummeted as much as 31 percent after Deutsche Bank AG said the automaker's shares may go to zero. Google Inc., the biggest seller of online ads, sank 4.7 percent on concern fourth-quarter revenue growth will stall. More than three stocks declined for every two that advanced on the New York Stock Exchange. The Standard & Poor's 500 Index retreated 0.4 percent to 927.46 at 12:11 p.m. in New York. The Dow Jones Industrial Average lost 0.32 point, or less than 0.1 percent, to 8,943.49. The Nasdaq Composite Index slipped 0.6 percent to 1,637.53. The decline in the U.S. halted a global rally that sent Europe's Dow Jones Stoxx 600 Index up as much as 3.1 percent and the MSCI Asia Pacific Index to a 3.3 percent gain after China announced a $586 billion economic stimulus package. The S&P 500, which has rebounded 9 percent from a five-year closing low on Oct. 27, is still down 37 percent this year after the financial crisis caused the economy to contract in two of the last four quarters. Goldman lost $6.79 to $70.99 and fell as low as $70.20. Barclays predicted a fourth-quarter deficit of $2.50 a share and cut its share-price estimate to $135 from $170. `Further Deterioration' Financial shares fell 2.8 percent as a group, the steepest decline among 10 industries in the S&P 500. HSBC Holdings Plc, Europe's biggest bank, set aside a more-than-estimated $4.3 billion to cover bad loans in the U.S. and forecast ``further deterioration.'' The U.S. unit ``declined markedly'' because of consumer and corporate loan defaults, the company said. Google slumped 5.5 percent to $313 and contributed the most to the S&P 500's retreat. Barclays analysts cut fourth-quarter revenue estimates for the company, saying the search-engine business has deteriorated. General Motors Corp. fell 24 percent to $3.32 and slid as low as $3.02. ``Even if GM succeeds in averting a bankruptcy, we believe that the company's future path is likely to be bankruptcy- like,'' Deutsche Bank AG analyst Rod Lache wrote today in a research note. The New York analyst lowered his recommendation on the shares to ``sell'' from ``hold.'' NRG Energy Inc. slid 5.7 percent to $22.49. The second- largest power producer in Texas rejected an unsolicited $6.1 billion takeover offer from Exelon Corp., citing a recent downgrade of Exelon's credit rating. Circuit City Bankruptcy Circuit City Stores Inc. trading was halted on the NYSE after the company filed for Chapter 11 bankruptcy amid rising competition from Best Buy Co., Wal-Mart Stores Inc. and online electronics retailers. The retailer, with 721 stores in the U.S., plunged 97 percent this year to less than $1 a share. American International Group Inc. rallied 14 percent to $2.41 after the government expanded its bailout of the insurer. The U.S. will reduce the original $85 billion loan that saved AIG in September to $60 billion, buy $40 billion of preferred shares, and purchase $52.5 billion of mortgage securities owned or backed by the company, according to the Federal Reserve. The insurer lost $24.5 billion, or $9.05 a share, in the period ended Sept. 30, compared with profit of $3.09 billion, or $1.19, a year earlier, AIG said. McDonald's Corp. added $1.55 to $57.02 and climbed as high as $58.10. Global sales at restaurants open at least 13 months climbed 8.2 percent, paced by Europe's gain of 9.8 percent compared with a year earlier. U.S. same-store sales increased 5.3 percent, the company said, as consumers pinched by rising food bills and unemployment bought double cheeseburgers and other $1 items. To contact the reporter on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net.

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