Wachovia's warning of a $1.1 billion writedown for October sparked concerns about further losses in the financial sector sending the markets tumbling during the midday. The Dow plummeted 170 points to 13,096 while Nasdaq plunged 58 points to 2638.

On the upside

Caris & Co. upgraded Hutchinson Technology (NYSE: HTCH) after the company reported sharply higher fourth quarter earnings.

Citi Investment Research analyst Heather L. Hunt said that a credit rating agency review of Ambac Financial (NYSE: ABK) will reveal that the bond insurer is in better financial health than investors perceive.

Higher licensing revenue and increased product sales lifted fourth quarter earnings for Dolby Laboratories (NYSE: DLB) to beat expectations by a wide margin.

On the downside

Leap Wireless (Nasdaq: LEAP) must restate financial results from 2004 through the second quarter of 2007 due to operating expense and revenue reporting errors.

ABX Air (Nasdaq: ABXA) notified major client DHL that it is in default of two commercial agreements. DHL is disputing certain reimbursement charges and has withheld payments to the air cargo services provider.

Webush Morgan downgrded World Fuel Services (NYSE: INT) after the company reported lower third quarter earnings due to an impairment charge.

In the broad market, declining issues outpaced advancers by a margin of more than 4 to 1 on the NYSE and by a margin of more than 5 to 2 on Nasdaq. The Russell 2000 which tracks small cap stocks tumbled 11 points to 769.