By Eric Martin Nov. 19 (Bloomberg) -- U.S. stocks fell, sending the Standard & Poor's 500 Index below its lowest close since 2003, as the biggest decrease in consumer prices and the fewest housing starts on record signaled the recession is deepening. JPMorgan Chase & Co., Cisco Systems Inc. and General Electric Co. helped lead declines after a government report that the cost of living slid by 1 percent in October, the most since records began in 1947. General Motors Corp. tumbled 15 percent as Chief Executive Officer Rick Wagoner pleaded for federal aid to save the auto industry. Citigroup Inc. slid 6.1 percent on the fifth-biggest U.S. bank's plan to buy $17.4 billion of assets from structured investment vehicles it advises. The Standard & Poor's 500 Index slipped 1.8 percent to 843.76 at 11:11 a.m. in New York. The Dow Jones Industrial Average lost 90.08 points, or 1.1 percent, to 8,334.67. The Nasdaq Composite Index decreased 1.4 percent to 1,462.98. Almost seven stocks fell for each that rose on the New York Stock Exchange. ``As the authorities try to find ways of stimulating the economy, sustained deflation would be a concern'' as consumers ``hold off purchases now hoping to get lower prices later,'' said Jeffrey Coons, co-director of research at Manning & Napier Advisors Inc. in Fairport, New York, which manages $18 billion. ``The corporate profit environment is going to be bleak for the same reason we've got inflationary pressure coming off the economy. The global slowdown is affecting both inflation and corporate earnings.'' Global Slump The retreat in the U.S. followed declines in Europe and Asia as concern mounted the economic slowdown will cut profits at financial firms and commodity producers. The S&P 500, Dow and Nasdaq each slid below their lowest closing levels in more than five years yesterday before a late-day rally spurred by index funds buying shares to replace Anheuser-Busch Cos., which was dropped from the S&P 500. JPMorgan, the largest U.S. bank by market value, tumbled 7.2 percent to $29.84. Cisco, the biggest maker of networking equipment, retreated 4.1 percent to $15.78. GE, the largest maker of power-generation equipment, fell 45 cents, or 2.8 percent, to $15.61. Citigroup, which was surpassed by US Bancorp today as the nation's fourth-largest bank by market value, retreated 51 cents to $7.85, its lowest price since October 1995. Economy Watch The bigger-than-forecast drop in the consumer price index was triggered by a plunge in fuel costs and discounts on automobiles and clothing to entice consumers amid a weakening economy. Excluding food and energy, so-called core prices unexpectedly fell for the first time since 1982. U.S. builders in October broke ground on the fewest new homes and obtained permits for future construction at the lowest levels on record, signs the housing slump may extend into a fourth year. Construction starts on housing fell 4.5 percent in October, less than economists forecast, to an annual rate of 791,000 that was the lowest since records began in 1959, the Commerce Department said. Building permits, a sign of future residential projects, dropped 12 percent to a 708,000 pace, the lowest since at least 1960. General Motors retreated 45 cents to $2.64. Chief Executive Officer Rick Wagoner and fellow auto-industry leaders are urgently seeking a slice of the $700 billion government bailout package. The CEO told the Wall Street Journal he had cut costs and invested billions of dollars in fuel-efficient vehicles and technologies. `Quite Difficult' Congressional Democrats propose tapping the financial- rescue package for the aid. President George W. Bush and Senate Republicans said they oppose that approach and instead prefer using $25 billion that was earlier approved by Congress to retool auto plants. Car company executives will today make their plea for government aid for the second day, as prospects for a Democratic-backed assistance plan waned. Ford Motor Co.'s Alan Mulally and Robert Nardelli of Chrysler LLC will join Wagoner to testify at a House Financial Services Committee hearing after telling a Senate panel yesterday that they need $25 billion to keep operating. ``Broad-based measures would be quite difficult in this current environment,'' Philipp Baertschi, a senior equity strategist at Bank Sarasin in Zurich, said in a Bloomberg Television interview. ``The stimulus probably should be more directed at homeowners because that is a bigger problem if house prices continue to fall rather than at carmakers.'' The S&P 500 has dropped more than 41 percent in 2008, on course for its worst year since 1931, as writedowns and credit losses topped $966 billion in the worst financial crisis since the Great Depression. Profits fell 17 percent on average at companies in the index that have reported third-quarter results, according to Bloomberg data. Analysts expect a 9.5 percent decline in full- year earnings, based on estimates compiled by Bloomberg. To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net.

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