NEW YORK - Stocks plunged Tuesday, driving the Dow Jones industrials down more than 240 points to their second-biggest drop in almost four years, as troubles piled up for subprime lenders. Investors, bracing for a wilting economy, fled the already deflated subprime mortgage sector on more news that lenders New Century Financial Corp., Accredited Home Lenders Holding Co. and General Motors Acceptance Corp.'s residential unit are facing financial problems. The Mortgage Bankers Association bolstered the belief that the struggles are widespread after it said new foreclosures surged to an all-time high in the last quarter of 2006. All three major stock indexes were knocked down about 2 percent. "The market's still jittery, and they're starting to get full-blown concerns over a bleed in the larger subprime mortgage market," said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds. Subprime lenders provide mortgages to people with poor credit. Though they are a relatively small part of the U.S. economy, their difficulties raise larger concerns about the housing market, which until its slowdown in recent years was a big source of money for consumers. That, coupled with the Commerce Department's report Tuesday that U.S. retailers eked out a meager 0.1 percent rise in sales last month, led Wall Street to reconsider whether Americans' buying power will withstand an economic slowdown. Tuesday's selloff was accentuated by options expiring soon and by volatility that has increased since the market's big plunge on Feb. 27 - a 416-point drop in the Dow that was caused partially by the escalating distress among subprime lenders. The Dow fell 242.66, or 1.97 percent, to 12,075.96. On March 24, 2003 the index dropped 307 points when U.S. casualties began mounting in Iraq. The blue chip index is now down about 710 points, more than 5 percent, from its record close reached Feb. 20. Many market watchers suspect that the market's correction is not over. The Dow is still above the low for the year of 12,050.41 reached March 5 and has yet to slip below the 12,000 level, which it reached for the first time last October. Broader stock indicators also fell by their largest amounts in two weeks. The Standard & Poor's 500 index fell 28.65, or 2.04 percent, to 1,377.95, and the Nasdaq composite index slid 51.72, or 2.15 percent, to 2,350.57. Volume on the New York Stock Exchange, where declining issues outnumbered advancers by 5 to 1, was high at 1.96 billion shares - more than the 1.47 billion shares at the same point on Monday but lower than the 2.38 billion shares traded on Feb. 27, when the Dow took its largest plunge since 2001. Gold prices fell, and the dollar was lower against most major currencies. A drop in the dollar versus the yen renewed anxiety about traders unwinding their yen "carry trades," or taking money out of high-yielding dollar assets bought with the low-yielding yen. The Russell 2000 index of smaller companies fell 19.88, or 2.52 percent, to 769.12. Light, sweet crude fell 98 cents to settle at $57.93 per barrel on the New York Mercantile Exchange.
Gilbert to address national conference
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JOHNSON CITY - Michael Gilbert, a certified financial planner and chief executive officer of Gilbert Advanced Asset Management, has been invited to speak at the Linsco/Private Ledger (LPL Financial Services) National Conference in Boston, to be held July 30 through Aug. 3. LPL is the nation's leading independent brokerage firm with more than 6,200 financial advisers and 3,000 branch offices. The conference is one of the largest financial conferences held in the United States for independent professional advisers, and more than 3,000 advisers are expected to attend. Gilbert, a frequent speaker at the conference, will present his new "Retirement Income Management System," designed exclusively to help retirees overcome what is called "longevity risk" - the risk of running out of money before death. The system uses elements of safety and growth and is based on a combination of several top academic studies and Nobel Prize-winning approaches. Gilbert has more than 30 years of experience in finance and investing, and in 2006 marked his eighth consecutive year being recognized by LPL as one of its top independent advisers in the nation. Gilbert Advanced Asset Management has close to $400 million under management and is headquartered in Johnson City.