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 On Tuesday, Wall Street resumed the sharp slide it began last week, as concerns about home loan defaults re-emerged when American Home Mortgage Investment Corp. reported troubles with its credit lines. The Dow Jones industrials tumbled nearly 150 points, prompting investors to turn to government bonds as a safer investment.
Adding to that anxiety Wednesday, the Wall Street Journal, citing anonymous sources, reported that Bear Stearns Cos.
-- which riled the markets weeks ago when it shut two hedge funds that bet on risky home loans
-- now faces big losses in a third fund with about $900 million in mortgage investments.
Better-than-expected quarterly profit and a $5 billion share buyback at media company Time Warner Inc. gave stock market futures a moderate lift from earlier lows, however.
The blue chip index is now 5.6 percent below the record close it reached in early July. Investors seem to have finally succumbed to worries about the credit markets that have dogged them for months. Stocks plunged at the end of last week, taking the Dow Jones industrials down 585 points over Thursday and Friday.
Dow futures expiring in September fell 43, or 0.32 percent, to 13,232. The Standard & Poor's 500 futures fell 10.50, or 0.72 percent, to 1,451.40, while the Nasdaq 100 futures fell 9.00, or 0.46 percent, to 1,936.75.
Bonds rose in pre-market trading, pushing down the 10-year Treasury note's yield to 4.73 percent from 4.75 percent late Tuesday.
In other economic data Wednesday, the Institute for Supply Management releases its manufacturing index, and the nation's big automakers release their July sales figures.
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 In corporate news, Dow Jones & Co., publisher of The Wall Street Journal, confirmed it has agreed to be bought by Rupert Murdoch's media conglomerate News Corp.
Another big concern for investors besides souring home loans has been the threat of inflation due to record-high crude oil prices.
Crude futures -- which closed Tuesday at $78.21 a barrel, its first record close in more than a year
-- slipped 65 cents to $77.56 in pre-opening trading on the New York Mercantile Exchange. Later Wednesday, the government will release data on last week's crude and gasoline inventories.
The dollar was mixed against other major currencies. Gold prices fell.
Worries about U.S. home loan defaults haven't affected only the U.S. markets; they have been rippling through the world markets, too.
In Asian trading, Japan's Nikkei stock average fell 2.2 percent, Hong Kong's Hang Seng index dropped 3.1 percent, and China's Shanghai Composite Index dipped 3.8 percent.
In European trading, Britain's FTSE 100 fell 1.57 percent, Germany's DAX index fell 1.27 percent, and France's CAC-40 fell 1.82 percent.
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On the Net:
New York Stock Exchange: http://www.nyse.com/
Nasdaq Stock Market: http://www.nasdaq.com/
[Associated Press;
by Madlen Read]
Copyright 2007 The Associated Press. All rights reserved. This
material may not be published, broadcast, rewritten or
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