Indexes Decline Amid Skepticism Over Fed

By MADLEN READ

By Madlen Read

The Associated Press

NEW YORK

Wall Street extended last week’s losses Monday as investors remained concerned about flagging growth and rising prices, and were skeptical that a special Federal Reserve credit auction will be a solution.

The Dow Jones industrial average fell more than 170 points and all the major indexes lost at least 1 percent.

Investors remained nervous even as the Fed offered $20 billion in 28-day credit through an auction Monday. The central bank will not release the results until Wednesday, but the aim of the auction is to encourage commercial banks to borrow from the Fed. That, in turn, is designed to boost banks’ lending to businesses and consumers and keep the economy humming.

Government bond prices rose as stocks fell. The dollar was mixed against other major currencies, while gold prices fell.

In economic data, the U.S. government said the current account deficit, the broadest measure of international trade, narrowed in the third quarter compared with the second quarter, as expected, to the lowest level in two years.

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