Jittery Dow takes a dive
NEW YORK -- Wall Street suffered its second big drop in a week Wednesday, with investors worried about spreading fallout from the credit crisis at banks and about a dollar that just keeps getting weaker. The Dow Jones industrial average fell more than 360 points -- just about matching its pullback of last Thursday.
A passel of worries tormented investors, including comments by New York Attorney General Andrew Cuomo about conflicts of interest in the mortgage industry that exacerbated declines among bank stocks.
Meanwhile, the dollar swooned amid speculation China will seek to diversify some of its foreign currency stockpiles beyond the greenback. And General Motors further dampened sentiment by posting a record loss tied to an accounting adjustment.
Oil hit a record, rising above $98 per barrel before retreating, and gold pushed higher, moves exacerbated by an anemic dollar.
The fear with a huge drop like Wednesday's is whether it is part not just of a correction, which is a 10 percent pullback in stock prices, but that it could be the beginning of a bear market. With the huge volatility that has swept Wall Street since the summer and triple-digit moves in the Dow becoming commonplace, no one can be sure.
The Dow fell 360.92, or 2.64 percent, to 13,300.02. The Dow, which had gained 117 points Tuesday, had fallen 362.14 last Thursday. It was the third time in a month the blue chip index has dropped by more than 350 points and leaves it up 6.71 percent for the year.
Broader stock indicators also pulled back Wednesday.
A drop in the New York Stock Exchange composite index proved steep enough to trigger trading curbs.
Washington Mutual Inc. stock fell after Cuomo stepped up claims the bank shares blame for inflated home prices nationwide. The bank fell $4.19, or 17.3 percent, to $20.04. Cuomo issued subpoenas to government-sponsored lenders Fannie Mae and Freddie Mac as part of his inquiry into what he regards as conflicts of interest in the mortgage industry. Fannie Mae fell $5.60, or 10.1 percent, to $49.79, while Freddie Mac fell $4.26, or 8.6 percent, to $45.13.
Other financial names fell as well.