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 In announcing it could lose up to up to $6 billion if all debt related to subprime mortgages were to go bad, the nation's No. 2 investment bank confirmed investors' fears not only about the company itself but about the likelihood that Wall Street will be forced to digest more bad news about souring debt. The debt is tied to mortgages of borrowers with poor, or subprime, credit.
The Dow Jones industrial average, for the third time in a month, dropped more than 350 points Wednesday, offering the latest sign of how jittery many investors remain. On Wednesday, the Chicago Board Options Exchange's volatility index, known as the VIX, and often referred to as the "fear index," jumped nearly 24 percent.
Dow futures on Thursday fell 7, or 0.05 percent, to 13,348. Standard & Poor's 500 index futures slipped 0.80, or 0.05 percent, to 1,482.00, and the Nasdaq composite index fell 12.00, or 0.55 percent, to 2,169.00.
Government bonds fell moderately after spiking Wednesday. The yield on the 10-year Treasury note, which moves opposite its price, rose to 4.31 percent from 4.30 percent in after-hours trading Wednesday.
The dollar was lower against other major currencies, while gold prices rose.
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 Investors trying to ferret out when a greater calm might return to the markets will likely follow testimony from Federal Reserve Chairman Ben Bernanke, who is scheduled to testify on the economic forecast before Congress' Joint Economic Committee. Wall Street will be looking for hints as to whether the central bank is likely to cut interest rates again when it meets next month. The Fed cut rates in September and again last week but issued comments that many investors regarded as aimed at tempering expectations for another cut.
The European Central Bank and, separately, the Bank of England, are expected to keep rates unchanged when they meet later Thursday.
Overseas, Japan's Nikkei stock average closed down 2.02 percent and Hong Kong's Hang Seng index fell 3.19 percent. Britain's FTSE 100 rose 0.23 percent, Germany's DAX index fell 0.01 percent, and France's CAC-40 fell 0.47 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 TIM PARADIS]
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