Stocks Plunge as Credit Outlook Worsens

Bear Stearns downgrade stirs more trouble as Dow loses 2%
By Greg Atwan,  Newser User
Posted Aug 3, 2007 3:44 PM CDT
The logo for Bear Stearns is shown at its corporate headquarters in New York, Wednesday, July 18, 2007. Stocks retreated Wednesday after Bear Stearns Cos. told investors there was little value left in...   (Associated Press)
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(Newser) – After two straight days of gains and a steady morning the Dow plummeted in a selloff late this afternoon, losing 2% of its value to close at 13179.71, down 283.62. Bear Stearns lost big after Standard and Poors downgraded the subprime-laden i-bank from "stable" to "negative," stirring more worries over the deeply troubled credit market. Financial stocks followed expeditiously: Lehman brothers lost almost 8%.

The Nasdaq was off 64.73 to 2511.25 and the S&P fell 39.144 to close at 1433.06—a loss of more than 2.5% for both indexes. A report that job growth sank this quarter also hit the floor hard, as traders continue to worry that shrinking consumer confidence will conspire with the housing slump to curb spending.