10:34 am - Stocks retreat on credit fears

NEW YORK (AP) - Stocks tumbled Friday after a plan to alleviate a liquiditycrisis at Bear Stearns Cos. touched off concerns about the severity of credittroubles. Each of the major indexes lost more than 1.5 percent on the day, withthe Dow Jones industrial average falling nearly 200 points. The plan by the New York Federal Reserve and JP Morgan Chase & Co. offersBear Stearns relief from a sudden liquidity crunch that analysts surmised couldhave felled the bond house. But the company's position on the precipice offinancial disaster left many investors shaken and spoiled some hopes thattroubles in the moribund credit market are on the mend. Stocks showed moderate increases in the early going after a Labor Departmentreport showed the Consumer Price Index remained flat for February. Wall Streethas been expecting inflation would show an increase. But the gains quicklydisappeared after investors learned about the severity of troubles at BearStearns. "This is another chapter in a book rather than a one-act play," said PhilOrlando, chief equity market strategist at Federated Investors. He said themarket is worried that further trouble in the credit markets will emerge andthat the ramifications of the credit strains and a slowing economy could resultin recession. "Investors thought they are probably more than norm than the exception andmaybe this is the tip of the iceberg," he said, referring to Bear Stearns. "Oursense is that this is sort of an amoeba here and this is sort of a broadlyspreading situation." According to preliminary calculations, the Dow fell 194.65, or 1.60 percent,to 11,951.09. The Dow had been down as much as 313 points. Broader stock indicators also declined but pulled off their lows. TheStandard & Poor's 500 index fell 27.34, or 2.08 percent, to 1,288.14, and theNasdaq composite index fell 51.12, or 2.26 percent, to 2,212.49. For the week, the major indexes were mixed, with the Dow showing a modestgain, the Standard & Poor's 500 index slipping and the Nasdaq composite indexshowing no change, finishing exactly where it did a week ago.