Stocks End Volatile Week With Huge Drop

Specialists work at their post on the trading floor of the New York Stock Exchange, Friday, Nov. 9, 2007 in New York. Wall Street extended its slide Friday after Wachovia Corp. warned it will take quarterly loan losses due to its debt portfolio, raising investor concerns that the credit slump shows no sign of abating. The Dow Jones industrial average fell more than 150 points. (AP Photo/David Karp) (David Karp - AP)

NEW YORK -- Wall Street finished a turbulent week with another huge drop Friday after major banks warned of further losses on their debt portfolios, raising investor concerns that the credit market slump shows no sign of abating. The Dow Jones industrial average fell more than 220 points.

Bank of America Corp., JPMorgan Chase & Co. and Wachovia Corp. all said the ongoing credit crisis will cause another round of heavy losses during the fourth quarter. Financial institutions took big hits during the last quarter as losses from subprime mortgages hurt their balance sheets, and these three companies were just the latest to report bad news that sent stocks lower.

BofA said continued "market dislocations," including those related to securities it owns that are backed by loans, will affect its fourth-quarter results. The bank did not provide an estimate of how large the impact will be. JPMorgan said difficult conditions may cause a fourth-quarter writedown, but did not say how much.

Wachovia, the nation's fourth-largest bank said it faced a $1.1 billion writedown for October alone. Investors also were rattled by speculation that Barclays PLC was about to announce a $10 billion writedown, though the U.K. bank denied the rumors.

"The extent of the situation is unknown, and that uncertainty doesn't give investors any reasons to believe that a bottom might be in place," said Todd Salamone, director of trading and vice president of research at Schaeffer's Investment Research. "We just got more of the same this week rattling investors, and the question for investors becomes what's the next catalyst to drive stocks higher."

Further worries about the continuing credit market slump kept investors on edge a day after Federal Reserve Chairman Ben Bernanke said he expects the economy to "slow noticeably" this quarter.

He also said the dollar's weakness "may have some effect on import prices" _ which was confirmed Friday in new government data. The Commerce Department reported U.S. import prices soared last month at their fastest pace since early last year.

Meanwhile, the University of Michigan's preliminary November consumer sentiment index tumbled for its weakest performance since October 2005.

The Dow Jones industrials fell 223.55, or 1.69 percent, to 13,042.74. The blue chip index is down 1,155.35 points, or 8.14 percent, since its trading high of 14,198.09, reached in August.

The Standard & Poor's 500 index was off 21.07, or 1.43 percent, at 1,453.70, while the Nasdaq composite index tumbled 68.06, or 2.52 percent, to 2,627.94.

Friday's performance capped another dismal week for stocks. The Dow racheted up and down, including a 360-point plunge Wednesday that was the blue chips' third drop of more than 350 points in a month; the volatility was proof of how anxious and how quick to sell investors are in what has become a steady flow of bad news about credit losses.

For the week, the Dow dropped 4.06 percent and the S&P 500 tumbled 3.71 percent. The technology-focused Nasdaq, which often trades with more volatility, plunged 6.49 percent.