Dow Off 208 on On Credit, Consumer Woes

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Dow Sheds 208 After Disappointing Wal-Mart Results Raises Concerns About Consumer
Spending.

Wall Street pulled back sharply Tuesday as investors worried about fundamental economic
problems as well as the ongoing fallout from credit market problems and stocks' own volatility.

The Dow Jones industrials skidded more than 200 points.

The downturn in stocks was first triggered by a report from Wal-Mart Stores Inc. that profit will fall below expectations this year as consumers rein in spending. Home Depot Inc., the world's
biggest home improvement chain, added to the slide when it said weakness in the housing
market caused quarterly profit to slide.

Confirmation that Sentinel Management Group Inc., which oversees $1.6 billion in assets, is
seeking to halt investor redemptions exacerbated the selling. Other funds are said to have similar problems as they face withdrawal demands at a time it has become difficult to value low-quality debt.

Hedge funds and other big institutional investors have taken a beating in recent weeks due to
the market turbulence. On Monday, Goldman Sachs Group Inc. said three funds it manages have had significant losses -- and infused $3 billion in capital into one of them.

Wall Street has been pummeled as a deepening credit crunch spooked the market, and led to
unease about potential losses at financial firms and funds. The Federal Reserve, which has injected some $64 billion of liquidity into the U.S. banking system since Thursday, said it stood ready
to act again should market conditions warrant.

While the market seemed to be looking past most economic news in recent weeks, on Tuesday the earnings reports and their implications for consumer spending compounded an already high
state of anxiety on Wall Street.

"The market is very, very sensitive at this point, and any news about a potential financial
problems is going to affect the way that the market trades," said Scott Fullman, director of
investment strategy for I.A. Englander & Co. "We've been seeing extreme sensitivity in the
financials, but also in the consumer stocks and industrials during the session."

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Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.73 percent from 4.78 percent late Monday. The fixed-income market has rallied as stock investors move into
securities deemed less volatile.

Stocks originally were lifted in early trading on government data that indicated inflation remains
in check. But, that gave way to further concerns about consumer spending and widening credit worries.

The Labor Department said wholesale prices rose in July for the fifth time in six months. Its
Producer Price Index advanced 0.6 percent amid higher energy costs. Excluding often volatile
food and energy costs, however, what's known as core PPI rose a modest 0.1 percent.

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