Credit Worries Clobber Stocks

Despite the slide, the major averages are still higher for the week. For the year, the Dow is still up 6.5%, the Nasdaq has gained 5.8%, and the S&P 500 has added 2.5%.

Trading curbs were put into effect on the New York Stock Exchange for the fourth time in 2007. A record 5.48 billion shares changed hands on the NYSE, as decliners toppled advancers by a 13-to-4 margin.

Volume on the Nasdaq reached 3.51 billion shares, with losers outpacing advancers 2 to 1.

The latest credit concerns hammered the battered financial sector even further. The NYSE Financial Sector Index lost 3.5%, and the Nasdaq Financial 100 Index fell 2.9%.

Among individual names, JPMorgan Chase (JPM Quote), Lehman Brothers (LEH Quote), Citigroup (C Quote) and Bear Stearns all slid by 5% or more.

BNP's action also punished European bourses. Paris' CAC 40 lost 2.2%, Germany's Xetra Dax was down 2%, and London's FTSE 100 fell 1.9%.

In an unprecedented move, the European Central Bank provided a loan overnight of 95 billion euros, or about $130 billion, to banks to help inject funds into the market. Back in the U.S., the Federal Reserve put $12 billion in reserves into the banking system.

Treasuries, viewed as a safe harbor in turbulent times, rallied, reversing the previous session's decline. The 10-year note rose 21/32 in price, yielding 4.78%, and the 30-year bond added 5/32, yielding 5.03%.