Stocks plunge as Dow drops 220, closes below 12,000

Investors are awaiting the weekend's meeting in Saudi Arabia of oil producers and consumer nations, which could bring some relief to the problem of soaring oil prices. But many analysts believe the gathering might end up being a mere finger-pointing session.

The concerns made for a difficult market.

"There has to be reticence about getting back in," said Stephen Carl, principal and head of equity trading at The Williams Capital Group. "It's definitely an ugly end to the week."

Bond insurer MBIA fell 86 cents, or 13%, to $5.59, while competitor Ambac Financial Group edged up 2 cents to $2.05, after losing their "AAA" rating from Moody's.

Another ratings move hit stocks of automakers. Standard & Poor's Ratings Services placed the corporate credit ratings of General Motors, Ford Motor and Chrysler on watch with negative implications. The classification means ratings have a one-in-two chance of being downgraded in the next three months. S&P believes high fuel costs will hurt the U.S. auto market through 2009.

GM fell $1, or 6.7%, to $13.79, while Ford lost 51 cents, or 8.1%, to $5.81.

The dollar fell against most other major currencies, while gold prices rose.

The Russell 2000 index of smaller companies fell 12.10, or 1.64, to 725.73.

Overseas, Japan's Nikkei stock average dropped 1.33%. Britain's FTSE 100 fell 1.53%, Germany's DAX index declined 2.12%, and France's CAC-40 fell 1.79%.

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