On Friday, the Dow Jones industrials fell more than 250 points and briefly slid below the 11,000 mark for the first time in two years in response to troubles at mortgage companies Fannie Mae and Freddie Mac and oil's continuing climb into record territory.
NEW YORK — Wall Street’s angst over the ongoing fallout from the credit crisis made for a turbulent end to a volatile week today — stocks tumbled, soared and then turned south again as investors tried to assess the dangers faced by the country’s biggest mortgage financiers, Fannie Mae and Freddie Mac.
The Dow Jones industrial average fell 128.48, or 1.1 percent, to 11,100.54 after having fallen earlier in the session to 10,977.68. It last traded below 11,000 on July 25, 2006.
Microsoft, one of the 30 Dow stocks, fell 20 cents to close at $25.25 a share. Boeing, also a Dow stock, dove $2.71 to $63.28.
Broader stock indicators also logged declines. The Standard & Poor’s 500 index fell 13.90, or 1.1 percent, to 1,239.49, and the Nasdaq composite index fell 18.77, or 0.8 percent, to 2,239.08.
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The Dow, which traded down more than 250 points in the session, briefly moved into positive territory today before resuming its decline.
A new high for oil prices above $147 a barrel also weighed on stocks.
Investors’ focus was on the fate of the government-chartered companies. Shares of Fannie Mae and Freddie Mac fell sharply during the week on concerns about their stability. Wall Street is worried that a collapse of the two financiers would cause further shock to the financial system, and trigger more losses to banks and brokerages with significant holdings of mortgage-backed securities.
The well-being of Fannie Mae and Freddie Mac is crucial because they hold or guarantee about $5 trillion worth of mortgages. Their troubles are just the latest depressing turn in a year-old credit crisis that shows no sign of ending, disappointing some stock traders who thought just months ago that the worst was perhaps over.