* Oil jumps more than $5, weighing on consumer stocks
* Credit jitters weigh on financial, bank shares
* Fannie, Freddie shares seesaw on bailout uncertainty
* Dow off 0.2 pct, S&P 500 unchanged, Nasdaq off 0.6 pct
(Updates to afternoon, changes byline)
By Steven C. Johnson
NEW YORK, Aug 21 (Reuters) - U.S. stocks fell on Thursday
on fears of more credit losses on Wall Street while soaring oil
prices rekindled concern about consumer and business spending.
Bank shares continued to struggle, with JPMorgan Chase & Co
<JPM.N> and insurer American International Group Inc <AIG.N>
among the biggest drags on the S&P 500. Goldman Sachs <GS.N>
shares also fell as analysts predicted more mortgage-related
write-downs at some of Wall Street's biggest financial firms.
Shares of consumer-oriented companies like Coca-Cola Co
<KO.N> also weighed on the market, as a jump of more than $5
per barrel in U.S. oil prices bodes ill for consumer spending.
However, energy shares rose. Chevron <CVX.N> rose 2 percent
to $88.15 and Exxon Mobil <XOM.N> advanced, also 2 percent, to
$80.38.
The decline in value of assets of financial firms, ignited
by the subprime mortgage crisis, still dominated investors'
thinking.
"There are going to be more write-downs. I don't think
anybody out there is expecting otherwise," said Marc Pado, U.S.
market strategist at Cantor Fitzgerald & Co in San Francisco.
"The good news is that the market is starting to separate
the financials from everything else. Every time financials go
down doesn't have to be a reason for everything to go down."
The Dow Jones industrial average <> declined 29.47
points, or 0.26 percent, to 11,387.96, while the Standard &
Poor's 500 Index <.SPX> was down 1.37 points, or 0.11 percent,
at 1,273.17. The Nasdaq Composite Index <> fell 15.04
points, or 0.63 percent, to 2,374.04.
Also, Fannie Mae <FNM.N> and Freddie Mac <FRE.N> erased
early losses of about 20 percent and pushed into positive
territory. Investors fear a possible government bailout of the
two home finance companies would wipe out shareholders, but
some analysts said the stocks might have been oversold.
Hopes that Federal Reserve Chairman Ben Bernanke would
express some sort of support for the two government-sponsored
enterprises during the Fed's meeting in Jackson Hole, Wyoming,
on Friday were also supporting prices, analysts said.
Possibly helping oil's surge, this week Goldman Sachs
reiterated its year-end forecast of $149 a barrel for U.S.
crude.
Shares of Fannie Mae were 8.6 percent higher at $4.78 while
Freddie Mac was down 0.3 percent at $3.24. Both companies are
viewed by many as critical pillars of the U.S. housing market
and investor are eager to see what sort of rescue they might
get from the government.
"Those stocks have been pounded. When they consolidated, I
think you had a lot of shorts that were willing to cover," Pado
said. "People were saying to themselves, 'let's not get too
greedy here.'"
But other financial shares were lower, with the S&P
Financial index <.GSPF> down 1.45 percent.
JPMorgan Chase lost 2.5 percent to $36.08 while AIG slid
4.7 percent to $19.82 amid a slew of negative reports on the
financial sector.
Citigroup analyst Prashant Bhatia widened his third-quarter
loss estimate for Lehman Brothers <LEH.N>. In addition, Bhatia
and Lehman Brothers analyst Roger Freeman cut their quarterly
earnings view for Goldman Sachs <GS.N> and Morgan Stanley
<MS.N>.
Bhatia projected Lehman to take an additional $2.9 billion
of write-downs in the third quarter. He expects $1.8 billion of
write-downs at Goldman and $1.7 billion at Morgan Stanley.
Shares of Lehman fell 2.6 percent to $13.37, while Goldman
Sachs dropped 3.2 percent to $153.24 and Morgan Stanley lost
2.2 percent to $3657.
(Additional reporting by Walter Brandimarte; Editing by )
