Market falls on credit fears; WellPoint down late

By Justin Grant

NEW YORK (Reuters) - Stocks fell for a third session on Monday, as investors dumped financial shares on fears of more credit losses and concerns that the U.S. economy may already be in recession.

The sell-off in financial stocks picked up speed after rumors circulated that Bear Stearns Co Inc BSC.N was facing a cash shortage. The brokerage called the speculation "totally ridiculous," but Bear Stearns shares still ended the day down 11.1 percent at $62.30.

Financials were among the top drags as the Bear Stearns rumors strengthened the conviction that banks would report further deep credit losses. Shares of Bank of America Corp fell 3.9 percent to $35.31, while rival Citigroup Inc slid 5.8 percent to $19.69.

Shares of health insurers fell after the bell as WellPoint Inc cut its 2008 profit outlook, citing higher-than-expected medical costs and lower-than-expected enrollment.

Texas Instruments' stock also sank after the market closed as the company cut its first-quarter profit and revenue outlook. The news also hurt other chip makers and may weigh on Nasdaq in Tuesday trading.

Adding to the market's woes, gold futures and other metal prices sank, pulling down shares of mining companies such as Freeport-McMoRan Copper & Gold Inc, which fell 5.9 percent to $93.97. Material stocks were among the S&P's top decliners.

"There's kind of an overhang of concerns about weakening U.S. economic conditions spreading globally," said Frederic Dickson, a market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

The Dow Jones industrial average tumbled 153.54 points, or 1.29 percent, to close at 11,740.15 in its seventh decline in its last eight sessions.