Stocks fall ahead of Thanksgiving amid worries about the mortgage market, record-high oil

NEW YORK — Wall Street resumed its slide Wednesday as unease about the wilting mortgage market and the broader economy triggered selling ahead of the unofficial start of the holiday shopping season. The Standard & Poor's 500 index and the Dow Jones industrial average each fell by more than 1.5 percent, with the Dow giving up more than 210 points.

The decline in the S&P 500 left the index in negative territory for the year. Many investments such as mutual funds either track or are measured against the S&P.

The worries over the economy sent investors rushing to the safety of government securities. The yield on the Treasury's 10-year note for a time fell below 4 percent for the first time since 2005. The shift into bonds came as the Dow briefly sank below the lows seen in the market's August pullback.

The stock market has been thrashing about recently as investors attempt to gauge how companies will fare amid a further slowdown in the U.S. housing market, deterioration of credit and record oil prices that crested above $99 a barrel in electronic trading ahead of Wednesday's session. Stocks, which have fallen in seven of the previous nine sessions, haven't enjoyed the boost seen in recent years during Thanksgiving week, which is capped by the retail bonanza Black Friday.

Economic readings did little to instill confidence among investors. The Mortgage Bankers Association said mortgage application volume fell 3.6 percent last week. Meanwhile, the slump in housing suggested banks will continue to face souring mortgage debt.

Government-sponsored lender Freddie Mac, which reported a $2 billion quarterly loss Tuesday and saw shares plummet nearly 29 percent, declined again Wednesday after an analyst downgrade. Countrywide Financial Corp., the nation's largest mortgage lender, lost further ground.

In other economic news, the Conference Board suggested an economic slowdown could accelerate in the coming months amid rising costs and further weakness in the housing market. Also, the Reuters/University of Michigan consumer sentiment survey showed its lowest reading in two years — an unwelcome development for retailers entering what are for many the most important months of the year.

The Commerce Department said jobless claims fell by 11,000 last week, a positive sign for U.S. employment, but the report didn't appear to alleviate anxiety about the potential for weaker consumer spending.

"People are buying and selling off the headlines. The market is so emotional," said Neil Hennessy, president and portfolio manager of Hennessy Funds. "You look at oil approaching $100. People are taking their money and going to the sidelines."