Ugly start for stocks

U.S. markets tumble at the start on talk of Merrill writedown, disappointment in Countrywide buyout details.

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January 11 2008: 9:38 AM EST

NEW YORK (CNNMoney.com) -- Concerns about financial sector earnings and the details of the Bank of America-Countrywide Financial deal helped send stocks lower at Friday's open.

The Dow Jones industrial average, the Nasdaq composite index and the Standard & Poor's 500 index fell by about 1 percent..

Bank of America announced it would purchase embattled mortgage lender Countrywide Financial for $4 billion in an all-stock transaction.

Countrywide (CFC, Fortune 500) shares fell 13 percent in pre-market trading on the news after surging 51 percent in trading on Thursday. Bank of America (BAC, Fortune 500) stock fell about 3 percent in pre-market trading.

Investors were haunted by the prospect that bank losses stemming from bad mortgage bets may be even deeper than originally thought.

The New York Times reported that Merrill Lynch (MER, Fortune 500) is expected to take a $15 billion hit when it reports results next Wednesday, nearly twice its earlier estimate.

Merrill, Citigroup (C, Fortune 500) and JP Morgan Chase (JPM, Fortune 500) are all due to report quarterly results next week.

Talk of the massive writedown appeared to dim the optimism that lifted stocks on Wall Street Thursday.

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