Stocks slide as service-sector data signal recession
Stocks plunge Tuesday, with the Dow industrials tumbling to their biggest drop in nearly a year, after a key service sector gauge contracted in January — possibly signaling that the U.S. economy is already in recession […]. The outlook for stocks of many financial firms remains clouded by uncertainty over charges linked to bad home loans. At the same time, the insurers of bonds tied to those loans are also coming under heavy pressure, threatening to worsen an ongoing credit crisis in global financial markets. Wall Street firms and regulators are said to be working on a plan to bail out these insurers. “The real problem is not just the sour economic problems but the bond insurers — and not knowing whether that rescue plan is going to come into place,” said Avalon’s Cardillo.