The markets opened sharply lower with the Dow plummeting 197 points to 10,858 over rising wholesale inflation and continued concerns about the financial services sector. Nasdaq skidded 36 points to 2177.

On the upside

Evergreen Solar (Nasdaq: ESLR) signed a contract valued at approximately $1.2 billion, the largest in the history of the company, to supply solar panels to Germany's IBC Solar AG.

First Horizon National (NYSE: FHN) swung to a larger than expected loss for the second quarter due to sharply higher loan loss provisions but the stock price recovered after collapsing yesterday.

Shares of Washington Mutual (NYSE: WM) recovered after the company reassured investors that the bank had over $40 billion in excess liquidity. Rrumors also circulated that the company will eliminate additional positions in order to cut costs.

On the downside

ViroPharma (Nasdaq: VPHM) announced plans to purchase Lev Pharmaceuticals in a cash and stock deal valued at approximately $617.5 million.

Shares of Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) extended their losses as investors continued to flee mortgage related stocks.

Oppenheimer analyst Meredith Whitney downgraded Wachovia (NYSE: WB) saying that the company will report losses for fiscal 2008 as well as 2009 and expects loan loss provisions for the second quarter to reach $9.5 billion.

In the broad market, declining issues outpaced advancers by a margin of more than 12 to 1 on the NYSE and by more than 4 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks plunged 13 points to 652.