Updated from 11:38 a.m. EST

Stocks in New York traded lower into the afternoon Monday as investors waited for the latest word on a temporary lifeline for the U.S. auto industry and as the

Federal Reserve

met for a likely rate-cut to key interest rates.

The

Dow Jones Industrial Average

was recently down 97 points at 8531, and the

S&P 500

was losing 14 points at 865. The

Nasdaq

declined 35 points to 1505.

The

Federal Reserve

convene a two-day meeting today; the central bank is expected to announce on Tuesday that it will lower interest rates nearly to zero.

A federal rescue plan for Detroit's Big Three automakers --

Ford

(F) - Get Report

,

General Motors

(GM) - Get Report

and

Chrysler

-- failed to pass the Senate late last week after the United Auto Workers union refused Republican senators' demand for aggressive wage reductions.

Chrysler and GM, though, have said they may have only weeks of sustainability remaining. President Bush is urging action on $25 billion in proposed

emergency loans for the automakers

. The White House said it might now be willing to use money drawn from the $700 billion Wall Street bailout, known as the Troubled Asset Relief Program (TARP). The Treasury also said it's prepared to pitch in.

Japanese automaker

Toyota

(TM) - Get Report

will suspend building at its new plant in Mississippi, according to a

Dow Jones

report. Investment in the plant, the first in the U.S. to manufacture the Prius hybrid, was projected at $1.3 billion. The plant was to employ 2,000 workers, according to the report.

Reuters

reported earlier that

Toyota

is expected to slash its 2009 sales forecast by at least 1 million vehicles and outline plans to cut costs at its year-end news conference next week.

The biggest news on Wall Street last week continued Monday, the arrest of market-maker

Bernie Madoff

on charges of securities fraud. The

SEC

alleges that the 70-year-old Wall Street fixture lost some $50 billion of client money in what they say amounted to a giant Ponzi scheme.

Nomura Holdings

(NMR) - Get Report

,

Banco Santander

( STD),

BNP Paribas

,

Royal Bank of Scotland

(RBS) - Get Report

and hedge fund Man Group all revealed

significant exposures

to the fraudulent scheme.

Meanwhile, diversified technology and manufacturing company

Honeywell

(HON) - Get Report

reaffirmed 2008 expectations, but said it expects profit to fall between 6% and 16% in 2009.

In other company news,

Goldman Sachs

(GS) - Get Report

and

Morgan Stanley

(MS) - Get Report

are expected to report their quarterly results this week --

Goldman

is expected to report its first quarterly loss as a public company.

On Monday, the Federal Reserve Bank of New York reported that, according to its Empire State Manufacturing Survey, the general business conditions index fell to -25.76 in December from -25.43 in November. It remained very close to the record low set in November, but beat forecasts for -28.0.

According to the survey, the new orders and shipments indices also remained near their recent record lows, and the unfilled orders index dropped to a new low.

OPEC is scheduled to meet this week to evaluate the effectiveness of its earlier decision to cut production targets by 1.5 million barrels per day, and to weigh the need for more cuts. Another OPEC production cut could help stabilize oil prices that have fallen with global economic hardships.

Tracking commodities, after rising earlier in the day crude oil was recently down 62 cents to $45.66 a barrel. Gold was gaining $16 to $836.50 an ounce.

Longer-dated U.S. Treasury securities were rising in price. The 10-year was adding 17/32 to yield 2.5%, and the 30-year was up 1 02/32, yielding 3%. The dollar was weaker against the euro, pound, and yen.

Overseas, European exchanges such as the FTSE in London and the DAX in Frankfurt flirted with both sides of the flat line Monday. In Asia, Japan's Nikkei ended higher, while Hong Kong's Hang Seng also ended with gains.

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