American stocks dropped for a third day, led by technology and raw-materials companies, after Corning Inc. cut its earnings estimates and commodity prices fell.

Corning, the biggest maker of glass for flat-panel screens, fell the most in two years. Newmont Mining Co. and Freeport- McMoRan Copper & Gold Inc. lost more than 3% as gold slid to a two-week low and Citigroup Inc. said a slump in commodity producers may worsen. The Dow Jones Industrial Average advanced, led by a 5.8% jump in General Motors Corp. on sales that decreased less than forecast.

“It’s very hard to judge how the stock market is anticipating or discounting the difficult economic times that very, very clearly lie ahead,” the founder of Valley Forge, Pa.-based Vanguard Group Inc., the second-biggest U.S. manager of stock and bond mutual funds, John Bogle, told Bloomberg Television.

The S&P 500 extended its 2008 slump to more than 13% as the Federal Reserve said business across most of America was “slow” last month as the housing market weakened. Almost all of the Fed’s districts reported pressure to raise prices because of higher commodity costs, according to the central bank’s Beige Book report.

Technology stocks in the S&P 500 fell 1.7%, the third straight day of losses greater than 1%. Corning cut its third-quarter earnings and sales estimates because television-set makers trimmed orders to work off excess inventory. The shares fell the most since July 2006, dropping 13% to $17.05.

An index of raw-material producers in the S&P 500 dropped 0.7%. Gold and silver fell as the dollar climbed against the euro, reducing the appeal of the precious metal as an alternative investment. A more restrictive lending environment is likely to diminish industrial growth, the chief U.S. equity strategist for Citigroup, Tobias Levkovich, wrote in a research report yesterday. He recommends investors avoid energy and raw-material producers.

“Over the next 12 months or so, you can expect commodity prices to be flat or down,” a St. Louis-based senior equity strategist at Wachovia Securities Inc., Scott Wren, told Bloomberg Radio. “There are still a lot of things that investors are afraid of and it’s just going to continue to cause a lot of volatility.”

Newmont Mining, the largest American gold producer, fell 3.4% to $41.39. Freeport-McMoRan, the world’s biggest publicly traded copper mining company, retreated 3.2% to $80.36.

Schlumberger Ltd., the world’s biggest oilfield services provider, contributed the most to a 0.4% decline in the S&P 500 Energy Index, its fourth straight decline.

Crude for October delivery fell as much as $2.49, or 2.3%, to $107.22 a barrel on the New York Mercantile Exchange, before settling down 36 cents at $109.35 a barrel.

Ospraie Management, the investment firm run by Dwight Anderson, will close its biggest hedge fund after slumping 38.6% this year. The New York-based Ospraie Fund fell 26.7% in August after energy, mining and resource equity investments plunged, Mr. Anderson said to investors yesterday.

“In the short term everything revolves around the oil price,” the head of investment strategy at Clariden Leu AG in Zurich, which manages the equivalent of $120 billion, Roger Kunz, said. “Ospraie demonstrates that for every piece of good news we have bad news.”