* Credit jitters persist despite latest actions
* IBM profit lends support to techs
* Financials drop as credit remains clogged
* Dow off 1.9 pct, S&P off 1.7 pct, Nasdaq down 0.8 pct
(Updates to late afternoon, changes byline)
By Kristina Cooke
NEW YORK, Oct 9 (Reuters) - U.S stocks fell for a seventh
straight session on Thursday as investors worried recent moves
by authorities worldwide to thaw frozen credit markets might
not be enough to avert a global recession.
The S&P financial index <.GSPF> dropped 4.6 percent as
Wednesday's coordinated global interest rate cuts and myriad
other official actions to unfreeze money markets did little to
boost confidence in the banking sector.
Credit markets remained clogged. The interbank cost of
borrowing dollars for any period beyond overnight rocketed --
three month dollar Libor hit its highest this year. For more
see [].
Morgan Stanley <MS.N> plunged by as much as 25 percent on
concern about the status of a planned $9 billion investment by
Japan's top bank, Mitsubishi UFJ Financial Group Inc <8306.T>.
But the bank shot down speculation about the deal and some
traders blamed the steep drop on short-sellers after the end of
a temporary ban on the bearish bets in financial stocks.
Energy companies Exxon Mobil <XOM.N> and Chevron <CVX.N>
were the top drag on the Dow as the price of oil fell $2 a
barrel. Shares of General Motors <GM.N> tumbled 17.5 percent to
$5.70 a day after the car maker reported European sales fell in
the first nine months of the year.
"The market is in show-me mode. There's a crisis of
confidence. I feel we're going to have gloomy headlines for
some time, including some more bank failures," said Bruce Zaro,
chief technical strategist at Delta Global Advisors Inc in
Plymouth, Massachusetts, adding:
"There's been muted reaction to anything that the
authorities have done" to deal with the credit crisis.
The Dow Jones industrial average <> fell 149.34 points,
or 1.61 percent, to 9,108.76, while the Standard & Poor's 500
Index <.SPX> dropped 17.18 points, or 1.74 percent, to 967.76.
The Nasdaq Composite Index <> was down 8.93 points, or
0.51 percent, at 1,731.40.
Volume was relatively light with many market participants
absent for the Jewish Yom Kippur holiday.
In early afternoon trading, Morgan Stanley's stock was down
12.4 percent at $14.72, having fallen as much as 25 percent.
Nasdaq losses were kept in check as solid quarterly profits
at tech bellwether IBM <IBM.N> raised hopes for the outlook for
other technology companies. IBM gained 1.9 percent to $92.23.
Shares of life insurers tumbled, with the Dow Jones U.S.
Life Insurance Index <.DJUSIL> shedding 13.4 percent.
XL Capital <XL.N> was one of the worst-hit companies in the
sector, plunging 52 percent to trade at $4.15 -- the steepest
percentage decliner on the New York Stock Exchange.
Earlier, Sandler O'Neill said that because of investment
leverage, they expect the mark-to-market effect on XL's book
value to be greater than on the typical insurer they follow.
Chevron <CVX.N> shares fell 5.5 percent to $69.05 and Exxon
Mobil <XOM.N> shares dropped 5.8 percent to $72.56.
In another sign consumers are stretched, Micron Technology
Inc <MU.N> said it will cut its workforce 15 percent due to
falling demand for and oversupply of NAND flash memory products
used in everything from digital cameras to mobile phones.
The news lifted shares of Micron IM Flash Technologies
joint venture partner Intel Corp <INTC.O>, which rose 2.2
percent to $16.61 on Nasdaq.
(Editing by James Dalgleish)
