Stocks Tumble As Wary Investors Reassess Risks
By bidding up stock prices all year, investors were effectively betting the housing slowdown wouldn't engulf the broader economy. Yesterday, that confidence appeared to be shaken.</br></br>Stocks and corporate-bond markets tumbled amid selling that was more widespread than during the three previous days of triple-digit declines this month. Along with risky bonds and anything connected to the housing market, investors sold off stocks, emerging-markets bonds and even high-quality corporate debt. The record trading volume in stocks reflected rising anxiety.</br></br>Meanwhile, roughly 1,300, or nearly 17%, of the around 7,800 stocks that trade on U.S. exchanges hit their lowest price of the past 12 months.</br></br>To many investors, that made yesterday's selloff more ominous than other big declines this year. Sid Bakst, a senior portfolio manager at investment firm Robeco Weiss, Peck & Greer, said the steady drip of bad news on subprime-mortgage loans and the failure of some leveraged buyouts to get long-term financing has made investors increasingly nervous.</br></br>"As each day has gone by, things have been leaking a bit more," Mr. Bakst said. "But today there was full-blown carnage."