By Elizabeth Stanton Dec. 3 (Bloomberg) -- U.S. stocks dropped as private reports showed job cuts climbed to a seven-year high and service industries shrank the most on record, spurring concern the yearlong recession is deepening. Freeport-McMoRan Copper & Gold Inc. tumbled 21 percent as the largest publicly traded copper company cut production and suspended its dividend amid “dramatic” price declines. General Motors Corp. slid 5.2 percent after saying it needs $8 billion to survive. All 10 industries in the Standard & Poor’s 500 Index declined as ADP Employer Services said payrolls fell by 250,000 last month, while the Institute for Supply Management’s service- industry index sank to the lowest since records began in 1997. The S&P 500 lost 11.68 points, or 1.4 percent, to 837.13 at 10:23 a.m. in New York. The Dow Jones Industrial Average fell 111.26, or 1.3 percent, to 8,307.83. The Nasdaq Composite retreated 1 percent to 1,434.94. Three stocks retreated for each that rose on the New York Stock Exchange. “The recession we’re in is going to be longer and probably the worst since the Great Depression,” said David James, a portfolio manager at James Investment Research in Xenia, Ohio, which oversees $2 billion. “I don’t think we’ve set the lows of the bear market, which will be much, much lower.” The S&P 500 erased about a third of yesterday’s rally as ADP’s estimate of job losses topped the 205,000 forecast by economists in a Bloomberg survey, heightening concern that the government’s Dec. 5 jobs data will also be worse than forecast. U.S. equities rose yesterday, rebounding from the market’s worst tumble since October, after General Electric Co. announced plans to maintain its dividend and the Fed extended terms of three emergency loan programs. The S&P 500 is up 11 percent from an 11-year low on Nov. 20. Record Swings The 30-company Dow average has swung by an average of 517 points between intraday highs and lows over the last two months, and the 20-day average exceeded a record 600 points in October. Freeport-McMoRan tumbled $4.53 to $17.29. The world’s second-largest copper producer said it will reduce output by 5 percent next year and 11 percent in 2010 after a “sharp decline” in prices. The company’s $2 annual payout to shareholders was suspended. Dividends are disappearing at the fastest rate in 50 years as the recession forces companies to conserve cash. Citigroup Inc., Genworth Financial Inc. and New York Times Co. led at least 91 companies listed on the biggest U.S. exchanges in reducing or suspending payouts in November, the most since May 1958, according to data compiled by Standard & Poor’s. GM’s Plea GM slumped 5.2 percent to $4.60. The automaker told Congress it must have $4 billion this month and $4 billion more by the end of January to stay in business. Chrysler LLC also told Congress it needs $7 billion right away. “I believe that an intervention will happen,” House Speaker Nancy Pelosi, a California Democrat, told reporters at a briefing yesterday as GM, Chrysler and Ford Motor Co. sent their aid requests to Congress. “Everybody is disadvantaged by bankruptcy, including our economy, so that’s not an option.” GM’s total request is $18 billion; Chrysler’s is $7 billion and Ford’s is $9 billion for a credit line it said it may not need to tap. Ford shares rose 9 cents to $2.79. Research In Motion Ltd. slid 1.3 percent to $36.82. The company said profit rose to no more than 83 cents a share in the quarter ended Nov. 29, missing a company forecast of as much as 97 cents. The results were preliminary, with the full financial report due on Dec. 18. Apple Inc., maker of the iPhone handset, retreated 2.8 percent to $89.92. 2008 Slump The S&P 500 is down 43 percent this year as credit losses and writedowns at financial firms approach $1 trillion and more economists forecast that the U.S. recession will be one of the most severe in the post-World War II era. The economy entered a recession in December 2007, the panel of economists that dates American business cycles said this week. Earnings dropped 17 percent on average at companies in the S&P 500 that reported third-quarter results and analysts estimate full-year profits will fall 11 percent, data compiled by Bloomberg show. That compares with 15 percent growth forecast in January. To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net.

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