Stocks Widely Mixed on Bear Stearns News

The Dow got a lift as investors aimed for large-cap stocks such as AT&T Inc., up 76 cents at $35.79, Verizon, up 79 cents at $34.61, and pharmaceutical maker Johnson & Johnson, up $1.39 at $64.04.

The Standard & Poor's 500 index fell 11.54, or 0.90 percent, to 1,276.60. The Nasdaq composite index, heavily populated by small and high-tech companies, fell 35.48, or 1.60 percent, to 2,177.01. The Russell 2000 index of smaller companies fell 12.42, or 1.87 percent, to 650.48.

Declining issues outnumbered advancers by about 5 to 1 on the New York Stock Exchange. Consolidated volume came to 5.69 billion shares, up from 5.18 billion Friday.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.30 percent from 3.44 percent late Friday.

The simple fact that Bear Stearns was valued at around $2 a share heightened investors' worries about how much of a blow the credit markets are dealing the financial industry. "How widespread is it? Nobody knows," Detrick said.

The pain for stockholders in Bear Stearns, which succumbed to losing bets on souring mortgages for borrowers with poor credit, will be sizable. JPMorgan is buying Bear, including its midtown Manhattan headquarters, for about 1 percent of the investment bank's worth little more than two weeks ago. Bear Stearns' buyout arrives after a short-term bailout Friday organized by the Fed and involving JPMorgan.

Bear Stearns shares fell 86 percent to $4.10 still above the buyout price, implying that some shareholders believe the deal terms might change.

Some investors worry Lehman Brothers Holdings Inc. might be next to fall. Lehman the investment bank considered most similar to Bear Stearns and other major investment banks are slated this week to report quarterly results.

DBS Group Holdings Ltd., Southeast Asia's largest bank, reportedly instructed traders in an e-mail early Monday not to do business with the bank. According to Dow Jones Newswires, DBS Group later told traders to disregard the earlier e-mail. Lehman denied there were any problems with DBS.

Lehman fell $7.51, or 19 percent, to $31.75.