Recession fears slam Wall Street
Stocks slump Tuesday morning as investors worry the stimulus plan won't go far enough. Financials lead the way lower.
NEW YORK (CNNMoney.com) -- Stocks slumped Tuesday morning as financial shares sold off amid worries that the recession is worsening, even as President Obama prepares to sign into law the $787 billion economic stimulus plan.
The Dow Jones industrial average (INDU) fell 210 points, or about 2.7% in the early going.
The Standard & Poor's 500 (SPX) index lost 28 points, or about 3.4%. The Nasdaq composite (COMP) lost 47 points, or about 3.1%.
U.S. markets were closed Monday in observance of Presidents Day.
Peter Cardillo, chief market economist for Avalon Partners, said uneasiness over the stimulus package is the prime suspect.
"I guess there's a lot of second thoughts about the stimulus package from the public," said Cardillo before the markets opened. "Obviously, there's a lot of fear out there, and that fear factor continue to weigh [on the markets.]"
Global markets on Tuesday were lower, with declines in the Asian and European indexes.
All eyes will be on President Obama, who is expected to sign the $787 billion stimulus bill into law sometime Tuesday, marking the final step for approval in what has been a contentious process and the first major challenge for the new president.
Enthusiasm over the stimulus plan and bank bailout have been tempered by an ongoing barrage of bad corporate and economic news. Last week, the Dow shed 5.2%, the S&P 500 fell 4.8% and the Nasdaq stumbled 3.6%.
Looking forward, the president on Wednesday is expected to unveil his long-awaited foreclosure prevention plan.
Companies: Wal-Mart (WMT, Fortune 500) reported a decline in its fourth-quarter profits and modestly higher sales. Taking into account a charge related to the settlement of class-action lawsuits, the firm's net income topped analysts' expectations. Shares rose 2%. Wal-Mart was the Dow's one gainer.
Tuesday is also deadline day for General Motors (GM, Fortune 500) and Chrysler. The automakers, who have already received approval for $17.4 billion in loans from the government, will submit their latest financial survival plans to the Treasury Department. GM shares rose 12%.
Oil and money: Oil prices fell $2.26 to $35.25 a barrel on the New York Mercantile Exchange. The U.S. dollar rose against major currencies, including the euro, the yen and the British pound. 
