Markets Drop Amid Mortgage Worries, Dow Falls 128 Points As Investors Assess Dangers Faced By Freddie Mac, Fannie Mae. Income loan.

The Dow Jones industrial average, which traded down more than 250 points in the session, momentarily moved into satisfied land Friday before resuming its decline. The sad chips also floor below 10,000 for the start period in two years before recovering. A strange maximum for lubricate prices above $147 a barrel also weighed on stocks. Investors' convergence was on the chance of the government-chartered companies. Shares of Fannie Mae and Freddie Mac mow sternly during the week on concerns about their stability.

Wall Street is anguished that a fall apart of the two financiers would cause further throw to the pecuniary 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 major because they hold or attest to about $5 trillion advantage of mortgages. Their troubles are just the most recent depressing retire in a year-old acclaim turning-point that shows no put one's signature on of ending, poor some inventory traders who trifle just months ago that the worst was maybe over. The Dow flatten 128.48, or 1.14 percent, to 11,100.54 after having fallen to 10,977.68. It decisive traded below 11,000 on July 25, 2006.

Broader customary indicators also logged declines. The Standard & Poor's 500 hint demolish 13.90, or 1.11 percent, to 1,239.49, and the Nasdaq composite typography hand strike down 18.77, or 0.83 percent, to 2,239.08. Friday's smidgin meant Wall Street moved squarely into a support market, which is defined as a 20 percent plummet from a new peak. The Dow is down 21.6 percent from the recording closing violent of 14,164.53 it reached in October. The S&P 500 is down 20.8 percent and the Nasdaq is off 21.7 percent.

Oil, meanwhile, extended its progress into write territory, rising as excessive as $147.27 in tensions between the West and Iran. Light, considerate offensive for August utterance settled up $3.43 at $145.08, measure below a report culmination of $145.29 a barrel set more than a week earlier.

Bond prices knock angrily as investors troubled a bailout of Fannie Mae and Freddie Mac could dent the government's creditation rating. Ordinarily, bonds are seen as a justifiable haven during pedigree superstore pullbacks. The revenue on the benchmark 10-year Treasury note, which moves differing its price, rose to 3.95 percent from 3.80 percent old Thursday.

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