* Citigroup agrees to rescue deal for Wachovia
* Rescues of European banks eclipse U.S. bailout deal
* Apple leads tech rout after broker downgrades
* Dow off 2.3 pct, S&P 500 of 3.7 pct, Nasdaq off 4.5 pct
(Updates to midday)
By Kristina Cooke
NEW YORK, Sept 29 (Reuters) - U.S. stocks slid on Monday
after Wachovia Corp <WB.N> became the latest major U.S. bank
to succumb to the global credit crisis, increasing fears about
the banking sector's stability as lawmakers geared up to vote
on a $700 billion financial bailout plan.
As U.S. lawmakers met in Washington, analysts questioned
whether the rescue plan was sufficient and whether it would
come soon enough to shelter the economy and stem the financial
turmoil that was spreading around the world.
European authorities were forced over the weekend to step
in and rescue a slew of European banks, while U.S. regional
bank Wachovia sold most of its assets to Citigroup <C.N> in a
deal brokered by the Federal Deposit Insurance Corp. Global
money markets remained frozen, even as central banks,
including the Federal Reserve, pumped cash into world markets
in an attempt to boost liquidity.
"A lot of people are saying this bailout is not enough,
that it is at best a partial solution. Fear and pessimism are
on the rise, especially given what happened over the weekend
with the European banks and most significantly with Wachovia,"
said Eric Kuby, chief investment officer of North Star
Investment Management Corp., in Chicago.
"Even if there was to be a relief rally, we first have to
get a vote on the bailout. We started Monday with more fear
than when we left on Friday."
The Nasdaq fell more than 4 percent, led by Apple Inc
<AAPL.O>. The stock of the iPod and iPhone maker tumbled as
much as 17.5 percent on concerns the company will suffer as
the economy slows.
The Dow Jones industrial average <> fell 252.81
points, or 2.27 percent, to 10,892.32, while the Standard &
Poor's 500 Index <.SPX> slid 44.59 points, or 3.68 percent, to
1,168.42. The Nasdaq Composite Index <> was down 99.03
points, or 4.54 percent, at 2,084.31.
Shares of Bank of America Corp <BAC.N> led financials down
in the S&P 500, with a drop of nearly 6 percent, while
American Express <AXP.N> was a drag on the Dow, with a slide
of more than 6 percent. The S&P financial index <.GSPF> fell
5.2 percent. Regional banks' shares fell sharply, as investors
tried to work out who could be the next victim of the credit
crisis.
Apple Inc <AAPL.O> fell 14 percent to $110.21 after
several brokerages slashed their recommendations on the tech
bellwether.
Energy companies' stocks fell as U.S. front-month crude
<CLc1> dropped more than $8 to below $99 a barrel, as the
financial turmoil spread to Europe, fueling concerns about the
global economy and lower demand.
Shares of Exxon Mobil <XOM.N> fell 2.4 percent to $78.70,
while the S&P energy index <.GSPE> tumbled 6.2 percent.
"There's a monster amount of fear out there. This is
global contagion. It's no longer just the United States," said
Joe Saluzzi, co-manager of trading at Themis Trading in
Chatham, New Jersey.
In Europe, the British government took over troubled
mortgage lender Bradford & Bingley <BB.L> and three European
governments partially nationalized banking and insurance group
Fortis <FOR.BR><FOR.AS>. And Germany's government threw a
lifeline to cash-strapped lender Hypo Real Estate <HRXG.DE> on
Monday.
Congressional leaders in Washington said they had a
tentative deal on a $700 billion U.S. bailout to buy bad
mortgage debt on the banks' books.
(Additional reporting by Steven C Johnson and Ellis Mnyandu;
Editing by Jan Paschal)
(Reporting by Kristina Cooke)
