Stocks were down sharply on Wall Street on Friday afternoon after JPMorgan Chase and the Federal Reserve moved to bail out Bear Stearns, the beleaguered investment bank.
An early-morning bounce gave way to a vertigo-inducing drop after Bear’s announcement, which ignited fears that large banks remain vulnerable to the continuing credit crisis. The Dow Jones industrials plunged 300 points, recovered much of that ground and then sank anew.
Shortly after 2:30 p.m., the Dow was down 287.62, or 2.4 percent, at 11,927.40.
The Standard & Poor’s 500-stock index, a broader measure of the stock market, was down 2.9 percent after following a similar morning trajectory. The Nasdaq composite index lost 3.1 percent. Major European markets closed off about 1 percent.
The news from Bear Stearns came after the bank had insisted for days that its finances were in adequate shape. But the situation rapidly changed.