Stocks Fall on Fears of Stalled Bailout

American stocks fell in the market’s worst two-day slump in six years on concern Congress will hold up a $700 billion bank bailout that the chairman of the Federal Reserve, Ben Bernanke, said is critical to preventing a recession.General Motors Corp., Dillard’s Inc., and Regions Financial Corp. tumbled more than 7% after members of the Senate Banking Committee expressed skepticism about Treasury Secretary Paulson’s plan. General Electric Co., the world’s third-biggest company, retreated 4.6% as Merrill Lynch & Co. downgraded the stock on “growing fundamental pressures.” ConocoPhillips and Newmont Mining Co. lost more than 3% as oil, gold, and copper prices decreased.The Standard & Poor’s 500 Index slid 18.87 points, or 1.6%, to 1,188.22, capping a two-day decline of 5.3%. The Dow Jones Industrial Average lost 161.52, or 1.5%, to 10,854.17, erasing a 128-point rally. The Nasdaq Composite Index declined 25.64, or 1.2%, to 2,153.34. Almost three stocks fell for each that gained on the New York Stock Exchange.“The credit crunch is going to become far more severe than anybody thought two weeks ago,” a senior investment officer at Chemung Canal Trust Co. in Elmira, N.Y., which manages $1.7 billion, Tom Wirth, said. “In my opinion this is not understood by the politicians in Washington.”The S&P 500 swung between gains and losses at least 25 times as Messrs. Bernanke and Paulson urged swift passage of the bailout measure, while lawmakers expressed objections. Senator Brown, a Democrat from Ohio, said his constituents hold a “universally negative” opinion toward the proposal, while Senator Bunning, a Kentucky Republican, said the plan would “take Wall Street’s pain and spread it to the taxpayers.”GM, the largest American automaker, tumbled 7.4% to $10.72. Dillard’s, the Arkansas-based department-store chain, retreated 9% to $11.53.All 10 of the major industries in the S&P 500 declined, with seven groups losing more than 1%.

Stocks Fall on Fears of Stalled Bailout

Stocks Fall on Fears of Stalled Bailout

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