Wall St Tumbles On Economy, Bank Rescue Fear

Shares of energy companies Exxon Mobil Corp and Chevron Corp rose after the Dow components posted better-than-expected profits.

U.S. stocks tumbled for a second straight day on Friday as a report saying a plan to relieve banks of money-losing assets may be put on hold compounded investor fears about fallout from the deepening recession.

The benchmark S&P 500 briefly slid 2 percent as investors pummeled bank stocks immediately following a CNBC television report that the plan to mop up toxic assets might be put on ice.

"The banking system is still in crisis mode," said Dean Barber, president of investment firm Barber Financial Group in Kansas City.

"The surge we saw in financials earlier in the week was more symbolism than it was substance. There wasn't anything that had been decided upon. There's no clarity who is going to get the money, how much they are going to spend."

The Dow Jones industrial average slid 100.84 points, or 1.24 percent, to 8,048.17. The Standard & Poor's 500 Index shed 12.41 points, or 1.47 percent, to 832.73. The Nasdaq Composite Index declined 17.17 points, or 1.14 percent, to 1,490.67.

Shares of Citigroup slid 5.6 percent to $3.68, as shares of Bank of America dropped 2.8 percent to $6.59. The S&P financial index fell nearly 1.5 percent.

Even before the CNBC report investors had been put on the defensive by news the U.S. economy shrank at its fastest pace in nearly 27 years in the fourth quarter, and other grim economic data and downbeat earnings added to worries about the predicament of businesses and consumers.