Stocks fell sharply on Friday, with the Dow ending over 200 points lower, as Wachovia and Fannie Mae became the latest lenders caught in the real-estate turmoil. For the week, the Dow lost 4.2 percent, and the broader Standard & Poor's 500 lost 3.9 percent. The technology-heavy Nasdaq was the biggest loser, falling 7 percent. Wachovia, the fourth-largest U.S. bank, said the complex debt instruments it held in its portfolio declined in value by $1.1 billion in October. Fannie Mae, the largest buyer and backer of home loans, said Friday its profits fell by half over the last nine months. The losses from Wachovia and Fannie Mae come after Citigroup said last week it expects to lose $8 billion to $11 billion in the fourth quarter due to credit- and mortgage-related problems. Stocks have plummeted as traders worried about the wider economic impact of losses at financial companies and the growing number of consumers holding expensive mortgages and high energy bills. Adding to investor concerns was a weak growth forecast from the 27-nation European Union, which said growth is expected to slow to 2.4 percent next year and in 2009, down from 2.9 percent this year. A University of Michigan report on consumer sentiment was well below estimates, but it did little to move markets. In a piece of positive economic news, the U.S. trade deficit fell to the smallest level in 28 months as a weak U.S. dollar helped boost exports. Oil prices resumed their climb toward $100 a barrel. Light sweet crude for December delivery rose 86 cents to settle at $96.32 a barrel on the New York Mercantile Exchange. Among stocks in the news, Merck announced Friday it will pay $4.85 billion to resolve most of the thousands of claims involving its painkiller Vioxx. Merck shares climbed almost 4 percent. The Dow Jones industrial average fell 223.55, or 1.7 percent, to 13,042.74. The S&P 500 fell 21.07, or 1.4 percent, to 1,453.70. The Nasdaq composite index fell 66.06, or 2.5 percent, to 2,627.94. The New York Stock Exchange composite index fell 144.13 to 9,733.34. The American Stock Exchange composite index fell 48.57 to 2,436.84. And the Russell 2000 index fell 8.52 to 772.38.
