The sorry state of the nation's credit markets took its toll on the stock market again Wednesday. The Standard & Poor's 500 index fell more than 2.9 percent, and every one of the 30 stocks in the Dow lost value. The drop occurred amid some more bad news about the mortgage industry.
It was a strange day in general because the government came out with a report showing productivity gains were really strong last month – it was the best performance in years, which normally would make the markets happy. But it was overshadowed by the steady drumbeat of bad news.
Washington Mutual, the largest U.S. savings and loan, issued a depressing report on the housing market, saying prices will continue to decline in 2008.
New York Attorney General Andrew Cuomo, who's been investigating the mortgage business, said he's looking into Fannie Mae and Freddie Mac, the two biggest U.S. providers of mortgage financing.
And General Motors issued its worst earnings report ever.
Although strong job growth and strong economic growth have been reported in recent months, climbing oil prices and, to a larger extent, the subprime mortgage crisis are fueling the market volatility.