US stocks finished lower on Monday, the first day of the shortened holiday week, as concerns about the outlook for company earnings weighed on investors.

The Dow Jones Industrial Average retreated 59.42 points or 0.69% to finish at 8,519.62. The S&P 500 dropped 16.25 points or 1.83% to 871.63. The Nasdaq Composite slumped 31.97 points or 2.04% to 1,532.35.

General Motors Corp. (NYSE: GM) plunged 97 cents or 21.60% to $3.52 as rating to "underperform" from neutral and cut his price target to $1 from $2."In light of the complete overhaul of GM's capital structure that will likely be required to turn the company into a 'viable' entity and to comply with the government's requirements to receive the just-agreed-upon $13.4 billion in loans, we think existing equity holders will be largely (if not entirely) wiped out in the process," said Credit Suisse analyst Christopher Ceraso. Additionally, Standard & Poor’s and Moody’s Investors Service downgraded the credit ratings of General Motors Corp. and Ford. "We've been pretty clear all along that this government money we view as buying these companies time, but not solving their problems. It's not going to change their fundamental issues," said Robert Schultz, the S & P credit analyst. Shares of Ford Motor Co. shed 36 cents or 12.20% to close at $2.59.

Toyota Motor (NYSE: TM), Japan's largest automaker, on Monday warned that it will post an operating loss this year. The auto giant will be losing money in its core business for the first time in its 70 years history as global economic downturn and a dramatic strengthening of yen severely impacted its performance in overseas market.

Financials retreated on Monday. Citigroup (NYSE: JPM) declined 27 cents or 3.85% to $6.75.American Express Company (NYSE: AXP) plummeted $1.01 or 5.20% to $18.42. Goldman Sachs (NYSE: GS) skidded $3.73 or 4.62% to $77.Morgan Stanley (NYSE: MS) lost 87 cents or $5.63 to $14.58.

Insurer MetLife (NYSE: MET) sank $4.53 or $12.11 to $32.88. Lincoln National Corp. (NYSE: LNC) and Prudential Financial Inc. (NYSE: PRU) were down over 9%.

Caterpillar (NYSE: CAT) announced cost-Cutting measures including cut in executive compensation by up to 50%. The equipment maker also said it will offer voluntary buyouts to 25,000 U.S. workers and impose smaller pay cuts on those staff. Shares of the company fell 91 cents or 2.13% to $41.78.

The largest US drugstore chain by store count, Walgreen Co. (NYSE: WAG), said on Monday its first quarter net income dropped 10.4% to $408 million or 41 cents a share, from $456 million or 46 cents per share in the corresponding quarter a year ago. Quarterly sales jumped 6.6% to a record $14.9 billion. Walgreen Co. slipped $1.10 or 4.22% to $24.98.

Among retailers, Target Corp. (NYSE: TGT) tumbled $1.64 or 4.76% to $32.78.Macy's Inc. (NYSE: M) slumped $1.27 or 11.96% to $9.35.J. C.