The markets opened sharply lower on renewed worries about the credit crunch while consumer confidence sank. The Dow tumbled 149 points to 12,704 while Nasdaq dropped 30 points to 2457.

On the upside

Airlines stocks continued to rise as the board of Delta Air Lines (NYSE: DAL) contemplated the possibility of merging with rivals UAL (NYSE: UAUA) or Northwest (NYSE: NWA).

Shares of Advanced Micro Devices (NYSE: AMD) bucked the sell-off among tech stocks. The company may benefit from antitrust proceedings filed by the state of New York against chip rival Intel (Nasdaq: INTC).

Information technology provider Synnex (NYSE: SNX) posted higher sales and better-than-expected 4th quarter earnings.

On the downside

Washington Mutual (NYSE: WM) may be in merger talks with JP Morgan Chase (NYSE: JPM), according to a CNBC report.

Shares of McDonald's (NYSE: MCD) fell after receiving neutral coverage by an analyst.

Analysts downgraded Juniper Networks (Nasdaq: JNPR) after its COO departed to work for Microsoft (Nasdaq: MSFT).

In the broad market, declining issues outpaced advancers by a margin of more than 3 to 1 on the NYSE and by more than 2 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks dropped 9 points to 710.