The credit worries that fueled the year’s second-biggest plunge of the Dow Jones Industrial Average yesterday could put an end to the private equity boom and further slow the real estate market, analysts said.

In a volatile day of trading, the Dow plummeted 449 points before rallying by the closing bell to finish off at 13,435.53, a drop of 349.54 points.

“There are definitely worries that this is going to spill over into the broader economy,” a Morningstar analyst, Paul Larson, said. “It’s a reversal of the wealth effect — instead of people using their homes as cash machines to fuel consumption, their homes become a cash drain.”

In a sign of the tightening credit markets, Wells Fargo, Countrywide, and Washington Mutual announced earlier this week that they were shutting down some of their riskier mortgage units.

In this environment, private equity firms, which have been a major driver of the market this year, will have more difficulty borrowing money for leveraged buyouts, Mr. Larson said. In addition, real estate companies will have a tougher time paying high prices for properties, driving down the prices. “I wouldn’t want to be selling a piece of property right now.”

Credit concerns were compounded by a report from the Commerce Department released yesterday that showed sales for new homes were down 6.6% in June. That Wall Street is in the midst of its second quarter earnings season added to the market jitters.

Yesterday’s trading came on the heels of last week’s record high, when the Dow shot past the 14,000 marker in an apparent sign that investors weren’t overly concerned with the subprime market.

But as the market dropped yesterday, it became clear that investors were seeking safety in other options, including treasury bonds. The yield on 10-year notes rose 0.14$ to 4.91% by the end of the day.

The Treasury secretary, Henry Paulson, told Bloomberg News in a television interview that investors appeared to be recalculating the risks in the credit markets.

“Whenever we have extended periods of good markets and benign economic situations, there is a tendency for laxness,” he said. “This is a wake-up call that lenders need to very careful when they price risks.”

While it may have been a wakeup call, brokers and financial consultants taking a break on Wall Street yesterday didn’t seem all that concerned.

“It is a significant decline, but it should recover soon,” a consultant for AIG, Alan Sauberli, said. “In February, there was an even bigger decline, but the market rectified in a week or two. I don’t feel people are in a real state of panic right now.”

A broker, who would identify himself only as Dennis, said his firm was getting a lot of calls from nervous investors, but was not saying the situation was dire.

“There is definitely more tension than the average day,” he said. “But what comes up, will go down. Smart investors just buy more shares in a down market.”

Wider stock market indices also registered significant drops yesterday. The Nasdaq composite index fell 58.04 points to 2,590.13, or 2.19%. The Standard & Poor’s 500 slid 36.71 points to 1,481.38, or 2.42%. Markets in Europe and South America also sustained losses, while Asian markets closed before the worst of the decline had begun.

Earnings reports were also a mixed bag for investors, who last week were reading optimistic second-quarter predictions.

Exxon Mobil said yesterday its second-quarter income dropped to $10.3 billion, from $10.4 billion. Per-share profit was also lower than analyst estimates, leading shares of Ford to drop 4.56 points to $88.23, or 4.91%.

Postings its first profitable quarter in two years, Ford Motor Co. saw a healthy rise early in the day, before leveling out at $8.09 a share, an increase of $0.12 or 1.51%. Second-quarter earnings for the company were $750 million.

Meanwhile, Apple’s stock increased 6.37% to $146 after reporting a 74% in quarterly profit. On Tuesday, the company’s stock dropped 6% to $134.89 after signs that iPhones were selling sluggishly.