Updated from 1:58 p.m. EST

U.S. stocks were plumbing negative territory Wednesday, as economic studies revealed that homebuilding slowed to levels last seen in the 1950s and consumer prices recorded a record decline.

The

Dow Jones Industrial Average

was losing 207 points to 8218, and the

S&P 500

was down 30 points to 830. The

Nasdaq

was falling 55 points to 1428.

Investors appeared hesitant to buy in the face of significant declines in the housing market. The Census Bureau said that

housing starts

declined 4.5% to an annual rate of 791,000 for October, the largest one-month decline on government records dating back to 1959.

"Lowest of all time kind of speaks for itself," said Mike Feroli, U.S. economist for JPMorgan Economics. "If you're looking for a silver lining, the pain now hopefully puts you in a place to clear out inventories down the line." But in exchange for cleared inventories, the U.S. will suffer declines in construction employment and slower growth, he said.

Separately, the Bureau of Labor Statistics reported that its

consumer price index

fell 1% for October thanks in part to falling energy prices. The CPI's decline was its largest on record. Economists were expecting a decline of 0.8%. The core rate dropped 0.1%, following a 0.1% uptick in September.

Even accounting for the index's volatile components, said Feroli, the decline in prices appears to be broad-based. He said that although the decline in consumer prices may not be this sharp every month, he expects prices to continue to flag going forward.

The

Federal Reserve's

Open Market Committee also released minutes from its latest meeting. The minutes indicated the central bank expects GDP to be flat for 2008, down from a previous estimate of 0.3% growth. The FOMC notes also said that additional interest-rate cuts may be necessary and indicated that the Fed would continue to do whatever is needed to aid the economy.

As the discouraging numbers added to traders' unease, several big-name companies were trying to salve wounds inflicted by the faltering economy.

After arriving hat in hand on Capitol Hill Tuesday to plead their case for access to federal funding, chief executives of woebegone

automakers

General Motors

(GM) - Get Report

,

Ford

(F) - Get Report

and

Chrysler

were attempting again Wednesday to exchange a grilling by members of Congress for billions of dollars in government aid. The Big Three have been walloped lately by a combination of flagging sales, troubles in their finance divisions and high labor costs.

"There's been no sign from any of the three auto companies that they are willing to change any significant aspect of their business models or their business plans," said Fred Dickson, director of private client research at DA Davidson. "It's basically, 'Here's what we've done in the past; it should be good enough.'"

Dickson said Senate Republicans will likely need to see signs that the automakers will restructure their business models before they act. "The next step is going to be to see what GM does," he said.

As General Motors continued to scrape for cash, German solar firm

SolarWorld

announced plans to buy assets of GM's German segment,

Adam Opel

.

The U.S. auto companies weren't the only ones coping with a tough market.

Toyota

(TM) - Get Report

said it will cut production in North American plants and lay off 250 of its temporary workers.

Boeing

(BA) - Get Report

, which along with GM is a Dow component, is resetting its production schedule as it attempts to recover from a strike by its machinists' union, according to a report by

The Wall Street Journal

.

Meanwhile, industrial conglomerate and fellow Dow company

General Electric

(GE) - Get Report

said it would reorganize its GE Capital finance branch to cut costs.

Elsewhere, government-controlled mortgage firm

Fannie Mae

(FNM)

received notice from the

New York Stock Exchange

that it faces delisting if it can't keep its share price above $1.

Staying with the financials,

Citigroup

(C) - Get Report

said it would buy $17.4 billion in assets held by structured-investment vehicles, funds that issue short-term debt to make long-term loans at higher debt. Such funds have been significantly hampered by the credit crunch.

Among technology stocks,

Microsoft

(MSFT) - Get Report

CEO Steve Ballmer said he is no longer considering an acquisition of

Yahoo!

(YHOO)

, although he remains open to a collaboration on search. Yahoo! head Jerry Yang, who had been an opponent of a merger between the two companies, said on Tuesday that he would be leaving the CEO spot.

In earnings news, bulk retailer

BJ's Wholesale

(BJ) - Get Report

reported rising third-quarter profit that was aided by gasoline sales.

As to

analyst actions

, Goldman Sachs put BlackBerry maker

Research In Motion

(RIMM)

on its conviction buy list.

In the realm of commodities, crude oil fell 77 cents to settle at $53.62 a barrel. The Energy Department said crude inventories climbed by 1.6 million barrels for the week ended Nov. 14, whereas economists were expecting a rise of 800,000 barrels. Gold was adding $2.60 to $738.60 an ounce.

Longer-dated U.S. Treasury securities were soaring in price. The 10-year note was up 1-8/32 to yield 3.38%, and the 30-year was rocketing 2-20/32, yielding 3.97%. The dollar was retreating vs. the euro, yen and pound.

Overseas, the FTSE in London and the DAX in Frankfurt were both trading lower. In

Asia

, Japan's Nikkei and Hong Kong's Hang Seng closed with losses.