9:06 am - US Stocks close mixed on economic worries

NEW YORK (AP) - Wall Street finished a dismal week with a mixed performance Friday as investors grappled with fears about the insurers of distressed mortgage-backed bonds and anxiety about the broader economy. The Dow Jones industrial average, which had risen in earlier trading, fell more than 60 points, while the Nasdaq composite index managed a gain. The market has been shaken in recent weeks by uncertainty surrounding bond insurers and whether they'll be able to handle huge losses in the value of mortgage-backed bonds. On Thursday, Moody's Investors Service lowered its rating on the bond insurer Security Capital Assurance Ltd. Then at midday Friday, Fitch Ratings, another credit rating agency, put a series of mortgage-backed securities insured by MBIA Inc. on negative watch. "The bond insurers are really on people's minds," said Kim Caughey, equity research analyst at Fort Pitt Capital Group. "This is a horribly complex issue." If the ratings agencies downgrade more bonds and bond insurers, the moves could hurt the banks that own the bonds -- and "just drive the credit markets into a downward spiral," Caughey said. "It's things happening further upstream that's making people nervous." Financial stocks fell due to heavy selling in the corporate bond and leveraged loan markets, and meanwhile, soaring commodities prices hit retailers, said Miller Tabak equity strategist Peter Boockvar. Crude oil prices jumped $3.66 to $91.77 a barrel on the New York Mercantile Exchange on expectations of disruptions in Nigerian exports. Retailers, which posted poor sales figures Thursday, have said that consumer spending is not only slowing because of problems in the housing market, but also because of high gasoline and food prices. According to preliminary calculations, the Dow dropped 64.87, or 0.53 percent, to 12,182.13 -- above its lows of the day, but well off its highs, too. The biggest losers among the 30 Dow companies were financial companies American Express Co. and JPMorgan Chase & Co. Broader stock indicators also turned lower. The Standard & Poor's 500 index fell 5.62, or 0.42 percent, to 1,331.29, while the Nasdaq composite index rose 11.82, or 0.52 percent, to 2,304.85.