Wall Street rally fizzles on subprime anxiety
EmptyNEW YORK -- Wall Street resumed its downward track Tuesday, falling sharply as renewed concerns about soured home loans blew away what had looked like a solid recovery rally. The Dow Jones industrials fell 150 points, while investors seeking safety moved into bonds, sending prices higher.
Early in the session, stocks had soared following strong earnings from General Motors Corp. and Sun Microsystems Inc. and amid somewhat mixed economic data. But stocks pulled back after American Home Mortgage Investment Corp. said Tuesday afternoon it hasn't been able to tap into its credit lines and has hired advisers to consider its options, including the sale of its assets. Wall Street has been concerned about tightening credit after some loans made to borrowers with poor credit have gone bad, and that anxiety contributed to the market's big plunge last week.
According to preliminary calculations, the Dow fell 146.32, or 1.10%, to 13,211.99. The Dow had been up nearly 140 points during the session.
Broader stock indicators fell. The Standard & Poor's 500 index fell 18.72, or 1.27%, to 1,455.19, and the Nasdaq composite index fell 37.01, or 1.43%, to 2,546.27.
Bond prices, which move opposite yields, rose as investors quickly fled stocks. The 10-year Treasury note's yield fell to 4.77% from 4.81% late Monday.