U.S. Stocks Fall on Buffett, World Bank Warning About Economy (Rita Nazareth and Lynn Thomasson)

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  March 9 (Bloomberg) -- U.S. stocks fell, extending the worst weekly slump in the Standard & Poor’s 500 Index since November, after Warren Buffett said the economy “has fallen off a cliff” and the World Bank predicted a global contraction.

  The S&P 500 fell 1 percent to 676.53, the lowest level since September 1996. The index, which decreased as much as 1.5 percent and climbed 1.7 percent, swung between gains and losses at least 25 times. The Dow average retreated 79.89 points, or 1.2 percent, to 6,547.05.

  “Uncertainty reigns,” said David Sowerby, who helps oversee about $100 billion at Loomis Sayles & Co. in Bloomfield Hills, Michigan. “What’s the floor on the S&P? It’s never ending.”

  The S&P 500 is likely to drop to 600 or lower this year as the global recession intensifies, Nouriel Roubini, the New York University professor who predicted the financial crisis, said in an interview today. Merrill Lynch & Co. economist David Rosenberg also forecast the index slumping to that level, saying it will probably bottom in October.

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