NEW YORK — Wall Street skidded lower in another fitful session Tuesday, with investors worried that the tumbling economy may not only cripple mortgage lenders such as Countrywide Financial but also create problems for other companies such as AT&T.
The Dow Jones industrials fell nearly 240 points.
Investors tried to take the market higher at many points during the day but eventually succumbed to another stream of bad news.
The Dow and the Standard & Poor’s 500 index are down more than 5 percent so far this year and the Nasdaq composite index is down nearly 8 percent, having been pummeled since Jan. 1 because of worse-than-anticipated readings on the economy.
The day’s events raised fears that fourth-quarter earnings reports, which start pouring in this week, may not meet already lowered expectations.
In the morning, the National Association of Realtors said its index tracking pending U.S. home sales fell 2.6 percent in November, a larger decline than the market expected. Jitters about the profitability of Countrywide and KB Home kept Wall Street on edge throughout the day. Also, President Bush reiterating the problems facing the economy probably added to the market’s uneasiness.
Many traders have bet recently that Countrywide might need to file for bankruptcy. Countrywide denied that rumor Tuesday, but its stock plunged 17 percent.
Late in the day, the chief executive of AT&T said at a conference that the phone company was seeing some slowdown in its consumer businesses, though not in wireless. That was the last straw for the market, and sent stocks tumbling.
“Anything that talks of contagion spreading to the general economy . . . will definitely spook the market,” said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co., referring to the softness AT&T is seeing. “The Fed still has more work to do.
“They’re clearly cutting rates into economic weakness, which to many means that they’re somewhat behind the curve. And that’s a concern for investors.”
The day’s abortive advance was due in part to rising hopes that the Federal Reserve, seeing the same bleak economic numbers as Wall Street, will continue its campaign of rate cuts to prevent a recession. The Fed meets Jan. 29-30.
The Dow fell 238.42, or 1.86 percent, to 12,589.07, after ratcheting up and down through the day.
Broader stock indicators also sank. The S&P 500 index dropped 25.99, or 1.84 percent, to 1,390.19, and the Nasdaq, reflecting uneasiness about tech stocks after AT&T’s news, declined 58.95, or 2.36 percent, to 2,440.51.
Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.78 percent from 3.84 percent late Monday.
