Stocks may fall anew on recession fears

By Caroline Valetkevitch

NEW YORK (Reuters) - Stocks could face a further pounding next week as evidence mounts that the economy has entered a recession and problems in the financial sector accelerate.

Next week's economic agenda is relatively light, until Friday, when the Consumer Price Index will command attention, especially with oil's jump this week to a record over $106 a barrel and the surge in other commodity prices.

But anxiety about inflation will take a back seat to the recession fears rippling from Wall Street to Main Street after Friday's government report showed employers cut payrolls for a second straight month.

At the same time, the financial sector has been pummeled by news showing further signs of troubles related to the subprime mortgage market.

For one, concern about the survival of Thornburg Mortgage Inc (TMA.N: Quote, Profile, Research) increased on Friday after the mortgage lender said it has $610 million of margin calls outstanding as of March 6, an amount exceeding its available liquidity.

The negative news trend is showing few signs of letting up, and could mean further losses for stocks.

"The sentiment right now is extremely bad," said John Praveen, chief investment strategist at Prudential International Investments Advisers LLC in Newark, New Jersey.

"On the economy side, today's numbers on the labor market probably confirm the U.S. is in a recession," he said, though he added that much uncertainty still exists on the subject.