Wall St. sees red as economic fears spark losses

NEW YORK, Nov 26, 2007 (AFP) – Wall Street saw a sea of red Wednesday in a heavy selloff as investors voiced fears that the housing slump and credit crunch could derail US economic growth. Analysts said retail sales over the Thanksgiving holiday weekend had appeared robust, but economists said the American consumer is being squeezed by falling house prices, tighter credit and spiking energy costs.

The Dow Jones Industrial Average lost a hefty 237.44 points (1.83 percent) to close at 12,743.44. The stock barometer has lost over eight percent of its value since the start of the month.

The technology-laden Nasdaq composite slid 55.61 points (2.14 percent) to 2,540.99 while the Standard & Poor’s 500 broad-market index shed 33.48 points (2.32 percent) to a finish of 1,407.22.

The sharp market decline followed a rally on Friday, but stocks have lost momentum in recent weeks as concerns have mounted about the health of the banking sector which is reeling from mortgage losses.

“The ‘R’ word is back. The stock market’s recent downdraft has rekindled worries that it is discounting the possibility of a recession,” Gregory Drahuschak, a market analyst at Janney Montgomery Scott said