10:23 am - Stocks end lower amid worries after House OKs plan

Stocks end lower amid worries after House OKs plan NEW YORK (AP) - In the end, congressional approval ofthe government's $700 billion financial rescue plan Friday did little to liftthe financial markets from their growing dejection over the obstacles stillfacing the economy. Wall Street ended an intensely volatile week with the DowJones industrials falling 157 points and the major indexes all suffering biglosses. The credit markets remained stagnant, with no immediate signs of whenlending and borrowing would return to levels even approaching normalcy. Investors dumped stocks late in the session after a big intraday rally,repeating a defensive move seen throughout the yearlong market pullback. Aslawmakers voted on the plan, which President Bush quickly signed into law, theDow advanced more than 300 points. After it passed, the blue chips moved in andout of positive territory. Investors had been anxious for resolution on the government's plan to buy upbad assets from banks and other institutions to shore up the financial industryand help resuscitate credit markets. Trading across markets was turbulentthroughout the week as investors tried to determine whether the plan would winapproval and what effect it might have if implemented. On Monday, the House'srejection took Wall Street and Capitol Hill by surprise and handed stocks theirbiggest losses in years. The Senate subsequently passed a sweetened version of the plan that addedtax breaks and raised the limit on federal deposit insurance from $100,000 to$250,000. But Wall Street has come to realize passage of the plan is not a quick fix. "We're three weeks into a severe credit crunch and it's causing untoldeconomic damage to the country," said Hank Smith, chief investment officer atHaverford Investments. He said while the bill's passage will help Wall Street,the broader effects of the paralysis in the credit markets have yet to emerge. "It's fairly reasonable to assume that this should help unfreeze the creditmarkets but what we don't know is what's happened so far. How much of a dent hasit put into the economy?" The credit markets indicated increased demand for safety. The yield on thethree-month Treasury bill, the safest type of investment, fell to 0.50 percentfrom 0.70 percent late Thursday. Yields have remained low in recent weeksbecause investors are eager to safeguard their money. The yield on the benchmark 10-year Treasury note, which moves opposite itsprice, rose to 3.60 percent from 3.64 percent late Thursday. The Dow fell 157.47, or 1.50 percent, to 10,325.38 after rising more than310 points just after the House vote began. Broader stock indicators also ended lower. The Standard & Poor's 500 indexfell 15.05, or 1.35 percent, to 1,099.23, and the Nasdaq composite index fell29.33, or 1.48 percent, to 1,947.39. The Russell 2000 index of smaller companies fell 18.27, or 2.87 percent, to619.40. Wall Street's decline Friday capped an extraordinary week. On Monday, theDow tumbled 778 points after the House voted down the financial rescue plan.Then stocks enjoyed a snapback rally Tuesday as investors grew more confidentthat Washington would assemble some kind of aid; the Dow jumped 485 points.Stocks showed mostly modest moves Wednesday as investors waited for the Senateto take up the bill. Then two-day pullback Thursday and Friday left stocks withhuge losses for the week. The Dow lost 7.34 percent -- its worst weekly losssince July 2002. Meanwhile, the S&P 500 fell 10.8 percent for the week and the Nasdaqdeclined 9.38 percent. The coming week marks the one-year anniversary of the peak in the Dow andthe S&P 500, while the Nasdaq hit its peak in late October 2007. The Dow is down27 percent from its high, while the S&P 500 is off 30 percent and the Nasdaq isdown 32 percent. The Dow Jones Wilshire 5000 Composite Index, which measures 5,000 U.S. basedcompanies' stocks, saw an estimated paper loss of about $1.5 trillion for theweek, the worst weekly return since the week after trading resumed following theSept. 11, 2001, terror attacks. Outside the New York Stock Exchange, traders said the late pullback Fridayreflected a pessimism of the past year that there was little underpinning mostrallies and therefore it was prudent to lock in profits when possible. Other traders agreed. "You're probably seeing a little buy the rumor, sell the news mentality,"said Ryan Larson, senior equity trader at Voyageur Asset Management, asubsidiary of RBC Dain Rauscher. Plus, he added, there's a feeling that thisplan "isn't a quick fix." "There are still a lot of problems out there," Larson said. The bill's approval came as investors digested word that Wells Fargo Co.agreed to buy Wachovia Corp. in a $15.1 billion deal. That cheered Wall Streetbecause, unlike several recent banking tie-ups, it wasn't put together at thebehest of regulators or using government money. The agreement upends a planannounced Monday by Citigroup Inc. to acquire Wachovia's banking operations for$2.16 billion, a move orchestrated by the Federal Deposit Insurance Corp.However, Citigroup was demanding that Wachovia honor its agreement. The FDICsaid it is standing behind the agreement it made with Citigroup. Wachovia shares rose $2.89, or 74 percent, to $6.80, while Wells Fargo fell60 cents, or 1.7 percent, to $34.56. Citigroup fell $4.15, or 18 percent, to$18.35, making it by far the steepest decliner among the 30 stocks that make upthe Dow industrials. Investors also appeared relieved that the government's September employmentreport wasn't worse, although the Labor Department said payrolls shrank by159,000, more than the 100,000 economists predicted. The nation's unemploymentrate remained flat at 6.1 percent, as expected. The dollar slipped against most other major currencies, while gold pricesfell. Light, sweet crude fell 9 cents to settle at $93.88 on the New YorkMercantile Exchange. Declining issues outnumbered advancers by about 2 to 1 on the New York StockExchange, where consolidated volume came to 6.5 billion shares, compared with6.2 billion shares traded Thursday. Overseas, Japan's Nikkei stock average fell 1.94 percent. Britain's FTSE 100rose 2.26 percent, Germany's DAX index rose 2.41 percent, and France's CAC-40rose 2.96 percent. The Dow Jones industrial average ended the week down 817.75, or 7.35percent, at 10,325.38. The Standard & Poor's 500 index finished down 113.78, or9.38 percent, at 1,099.23. The Nasdaq composite index ended the week down235.99, or 10.81 percent, at 1,947.39. The Russell 2000 index finished the week down 85.39, or 12.12 percent, at619.40. The Dow Jones Wilshire 5000 Composite Index -- a free-float weighted indexthat measures 5,000 U.S. based companies -- ended at 11,294.13, down 1,052.90points, at 8.53 percent, for the week. A year ago, the index was at 15,551.90. Copyright 2008 Associated Press. All rights reserved. This material may not be