Stocks Fall on More Credit Writedowns By Joe Bel Bruno, AP Business Writer

NEW YORK (AP) -- Wall Street extended its slide in early trading Friday after Wachovia Corp. warned it will take quarterly loan losses, raising investor concern the credit slump shows no sign of abating.The nation's fourth-largest bank said in a filing with the Securities and Exchange Commission that credit market volatility could cause a $1.1 billion writedown for October alone. The problem stems from its asset-backed securities, such as collateralized debt obligations, that have lost value on sinking investor demand.

Investors also were rattled by speculation that Barclays PLC was about to announce a $10 billion writedown. Though the British bank denied the rumors, it demonstrated that Wall Street continues to worry that the summer's credit turmoil shows no signs of abating, and has a broader impact globally.

Further worries about the continuing credit market slump kept investors on edge a day after Federal Reserve Chairman Ben Bernanke said he expect the economy to "slow noticeably" this quarter. His comments added to the week's declines -- contributing to a slide this week on concerns about continuing credit woes, a weakening dollar and rising oil prices.

He also said the greenback's problems "may have some effect on import prices" -- which was confirmed Friday in new government data. The Commerce Department reported U.S. import prices soared last month at their fastest pace since early last year while export prices jumped at more than a decade high.

The Dow Jones industrials fell 144.37, or 1.09 percent, to 13,121.92 in the first hour of trading.

The Standard & Poor's 500 index was off 19.26, or 1.31 percent, at 1,455.51, while the Nasdaq composite index tumbled 54.91, or 2.04 percent, to 2,641.09.

Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.25 percent from 4.27 percent late Thursday. Meanwhile, both gold and the dollar were lower.

Light, sweet crude oil fell 30 cents to $95.16 a barrel on the New York Mercantile Exchange.

Investors were also uneasy about tech stocks after Qualcomm Inc., the nation's second-biggest maker of chips that run mobile phones, predicted that heightened competition and legal troubles will cause 2008 results to fall 4 percent to 7 percent below Wall Street projections.

Qualcom fell $2.45, or 6.2 percent, to $37.31.

Wireless high-speed Internet provider Clearwire Corp. and Sprint Nextel Corp. announced before the bell they scrapped an agreement to jointly build a nationwide WiFi network. Clearwire also reported its third-quarter loss widened more than expected. Clearwire plunged $4.03, or 22.3 percent, to $14, while Sprint shed 19 cents to $16.35.

Merck & Co. said it will pay $4.85 billion to settle thousands of lawsuits over its painkiller Vioxx -- a move considered to be the biggest drug settlement ever. The offer was finalized early Friday as Merck and the plaintiffs met with three of the four judges overseeing the claims. Merck rose $1.70 to $56.49.

Walt Disney & Co. shares fell 60 cents to $33.03 after the entertainment company said late Thursday fiscal fourth-quarter profit rose 12 percent, driven by sports network ESPN and turnout at its U.S. theme parks. However, executives remain concerned about a Hollywood writers strike that began this week.

Overseas, Japan's Nikkei stock average closed down 1.19 percent and Hong Kong's Hang Seng index rose 0.08 percent. In afternoon trading, Britain's FTSE 100 fell 0.66 percent, Germany's DAX index rose 0.50 percent, and France's CAC-40 shed 0.96 percent.

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