Stocks sink as pessimism persists

NEW YORK — Despairing investors keep unloading stocks — and there are no signs that the selling will end any time soon.

Wall Street tumbled again Friday, giving the market a painful end to another terrible week, one that left the major indexes down more than 6 percent. Stocks did end well off their lows after the White House doused fears that the government would nationalize crippled banks. Investors who worried about seeing their shares wiped out by a government takeover welcomed the news, but it didn't erase broader concerns about the economy.

For weeks, Wall Street has bristled at being controlled by Washington. Investors grew impatient as policy-makers tried to fashion plans that would help the economy. And although investors are still fearful the government might do more harm than good, there are now greater worries that the economy's woes might simply be too big to corral, which could leave investors to wait for the economy to mend itself. The situation is producing little appetite for diving into the market, even with stocks at record lows.

White House press secretary Robert Gibbs said Friday afternoon the Obama administration continues to "strongly believe that a privately held banking system is the correct way to go."

Shares of financial bellwethers Citigroup Inc. and Bank of America Corp. plunged on worries the government will have to take control. Citigroup fell 22 percent, while Bank of America fell 3.6 percent. But the stocks had been down as much as 36 percent during the session.

According to preliminary calculations, the Dow industrials fell 100.28, or 1.3 percent, to 7,365.67 after earlier falling more than 215. On Thursday, the Dow broke through its Nov. 20 low of 7,552.29 and closed at its lowest level since Oct. 9, 2002, the depths of the last bear market.

One component of the Dow, General Motors Corp., saw its shares on Friday tumble to their lowest level in more than 70 years, pulled down by a drop in the broader markets and continued speculation about the future of the struggling automaker.

GM shares hit a low of $1.52 in early afternoon trading, before rebounding somewhat to close down 23 cents, or 11.5 percent, at $1.77. The low matched a record set July 26, 1934, according to the Center for Research in Security Prices at the University of Chicago.

The price is adjusted for splits and other changes.