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Updated from 4:04 p.m. EST

Stocks in the U.S. fell hard again Friday as increased loan losses at


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and a weak quarter from


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weighed on sentiment and had the major averages in the red all session.

The selling accelerated in the final minutes of the day. The

Dow Jones Industrial Average

sank 223.55 points, or 1.69%, to 13,042.74, and the

S&P 500

dropped 21.07 points, or 1.43%, to 1453.70. The

Nasdaq Composite

plunged by 68.06 points, or 2.52%, to 2627.94.

"There were not a lot of people willing to go long into the weekend," said Larry Wachtel, senior market analyst with Wachovia Securities. "It looked like with financials firming up we'd have a better final hour, but the market simply faded. There wasn't any other trigger for the late-day decline. We've had a big correction, so now it's a bottoming process that will lead us into next week."

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The major averages notched a second losing week in a row. The Dow lost 4%, and the S&P 500 closed down 3.8%. The Nasdaq suffered the most, tumbling more than 6.5%.

Breadth was weak and volume was heavy heading into the weekend. On the

New York Stock Exchange

4.44 billion shares changed hands, as decliners toppled advancers by an 8-to-3 margin. Volume on the Nasdaq reached 2.95 billion shares, with losers beating winners 2 to 1.

Wachovia started the initial wave of selling after it became the latest lender to announce a writedown, following


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Merrill Lynch



Morgan Stanley

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The fourth-largest U.S. bank said it expects to record a $1.1 billion writedown in debt obligations for October alone because of the recent subprime mortgage and credit mess. Shares of Wachovia reversed early losses and closed 0.9% higher at $40.65.



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ended down 3.6% as rumors swirled that the lender would be the next in line to announce a hefty debt-valuation charge. Barclays denied the rumor it would write down $10 billion due to exposure, though it didn't comment on whether there would be a writedown at all.

Fannie Mae


shares were also stung by the subprime mortgage and credit market volatility. The company said it had a fiscal third-quarter loss of $1.4 billion, or $1.56 a share, more than doubling its losses from a year ago. Shares lost 80 cents, or 1.6%, to $49.

Elsewhere, Qualcomm dragged on technology stocks. The company posted fiscal fourth-quarter earnings and revenue numbers late Thursday that exceeded Wall Street's estimates, but poor fiscal 2008 guidance dropped the stock 4.2% to $38.10.

Major tech names were under pressure for another day.

Research In Motion


was 9.1% lower,


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shed 5.8%,


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fell 4.9%,


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declined 4.3%.

Last time out, weak monthly retail chain-store sales, a near 10% drop in


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and more rhetoric from

Federal Reserve

Chairman Ben Bernanke combined to sink the market. The major averages, though, managed to rebound from heavy selling, paring losses in the final hour of trading.

The Dow ended down 33.73 points, or 0.25%, at 13,266.29 -- nearly 200 points above its session low. The S&P 500 also bounced back from its worst, finished lower by 0.85 point, or 0.06%, to 1474.77.

The Nasdaq was the hardest hit, plunging by more than 90 points around midday. By the close it showed a loss of 52.76 points, or 1.92%, at 2696.

Following the last close, Dow component


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narrowly beat estimates, and chipmaker


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posted a profit that more than doubled from a year ago. Shares of Disney fell 2.7% to end at $32.74, and Nvidia closed 1.4% lower at $33.36.

Aside from earnings, traders had to focus on the latest batch of economic data. The Labor Department said that its import price index jumped 1.8% last month, well above expectations. At the same time, the Commerce Department said that the international trade balance unexpectedly narrowed to a deficit of $56.5 billion during September from a revised $56.8 billion in August.

Additionally, the University of Michigan said the November reading of its consumer sentiment index came in at a surprisingly sluggish 75.0, the lowest level in two years.

Commodities were mostly higher. Crude added 86 cents to close at $96.32 a barrel, gold was lower by $2.80 at $834.70 an ounce, while silver tacked on 3 cents to $15.54 an ounce.

U.S. Treasuries were rallying, sinking yields. The 10-year note rose 16/32 in price, yielding 4.22%. The 30-year bond was higher by 1-2/32 in price, yielding 4.60%. Not surprisingly, the dollar continued to slide against the euro.

Overseas markets were mostly lower. In Asia, Hong Kong's Hang Seng tacked on 0.1%, while Japan's Nikkei 225 slipped 1.2%. Among European bourses, London's FTSE 100 lost 1.3%, and the Paris CAC 40 fell 1.9%.