Stocks Tumble On Recession Worries
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American stocks tumbled, led by banks, retailers, and technology companies, as oil jumped 16% and investors speculated the Treasury’s plan to buy toxic mortgage assets will fail to prevent a recession.
The Standard & Poor’s 500 Index lost 3.8%. Sovereign Bancorp Inc., Marshall & Ilsley Corp., and Washington Mutual Inc. sank more than 21%, sending the S&P 500 Banks Index to a record plunge, on concern the government bailout will lower the value of mortgage loans they hold. Apple Inc. and Cisco Systems Inc. dragged down computer stocks on expectations slower growth will reduce sales.
“They really haven’t changed the economic fundamentals at all,” the co-director of research at Manning & Napier Advisors Inc., , Jeffrey Coons, said. “We still have a debt-laden U.S. consumer facing falling employment.”
