Stocks tumbled Thursday as the ailing credit market and a spike in home foreclosures intensified worries about a sagging economy. The Dow Jones industrials...

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NEW YORK — Stocks tumbled Thursday as the ailing credit market and a spike in home foreclosures intensified worries about a sagging economy.

The Dow Jones industrials fell 214.60 to 12,040.39 — almost slipping below the 12,000 level, which it briefly did in January for the first time since November 2006.

Microsoft, one of the 30 Dow stocks, sank 55 cents to close at $27.57. Boeing, also a Dow stock, fell $1.20 to $79.51.

Broader indexes also retreated. The Standard & Poor’s 500 index fell 29.36, or 2.2 percent, to 1,304.34, and the Nasdaq composite declined 52.31, or 2.3 percent, to 2,220.50.

Concerns about credit grew after Thornburg Mortgage and a Carlyle Group bond fund revealed troubles with investments backed by mortgages. The entities failed to make margin calls, payments to guarantee much larger debt or investments.

And the genesis of the credit concerns that erupted last year — souring mortgage loans — dealt investors another blow after the Mortgage Bankers Association reported home foreclosures rose to record levels in the fourth quarter.

Worries about defaults have made lenders hesitant to extend credit, preventing the credit markets from functioning normally.

Weighing on financial stocks and the broader market was Wall Street’s sense that credit troubles are seeping further into areas of the financial sector once deemed safe.

“It’s an ugly day in a chain of ugly days,” said JPMorgan equities analyst Thomas J. Lee.

The Dow managed a moderate gain after a volatile session Wednesday but had fallen in the four previous sessions.

The market’s performance going forward will rely largely on today’s employment report. Economists on average predict a modest gain in February payrolls, but some anticipate a decline.

According to Lee, a bad jobs number could send the stock market lower by confirming investors’ fears of a recession, while a good jobs number will probably be met with some skepticism.