Wall Street hurt by mortgage worries

By Emily Chasan

NEW YORK (Reuters) - U.S. stocks slid on Monday as a worldwide flight from riskier assets moved into a second week, fed in part by heightened concerns about the flagging health of the subprime mortgage market.

Lenders to home buyers with poor credit histories were the session's standout laggards, led by a stunning 70 percent drop in shares of New Century Financial on fears it could go bankrupt. That spread across the sector, and others sank as well. The stock of Accredited Home Lenders fell 26 percent and was the No. 2 percentage loser on Nasdaq.

For much of the session, it appeared as if U.S. large-cap stocks, at least, would dodge the global swoon in equities that has chopped nearly $2 trillion off the value of stocks worldwide in the past week. But investors capitulated in the last half hour of trading, as traders said the benchmark S&P 500 index fell below a key technical support level.

"There's been a change in psychology and there's been a change in risk appetite among investors, and we can't expect the bottom after two weeks," said Phil Orlando, chief portfolio manager at Federated Investors in New York.

The Dow Jones industrial average fell 63.69 points, or 0.3 percent, to end at 12,050.41. The Standard & Poor's 500 Index

slid 13.05 points, or 0.94 percent, to finish at 1,374.12. The Nasdaq Composite Index dropped 27.32 points, or 1.15 percent, to close at 2,340.68.

Decliners outnumbered advancers by a ratio of more than 4 to 1 on both the NYSE and the Nasdaq.

The Dow's losses were muted compared with the rest of the market. Some investors ventured back into equities by buying consumer staples and health-care stocks, which are often seen as safer bets in times of turmoil.