Stocks continue bleeding

After opening sharply lower, the Russell 2000 (NYSE:IWM), along with other major indices, remains besieged midday Friday after the credit crisis continued to ravage Wall Street.

At 1:45 p.m. ET, the Russell 2000 was down 1.91, or 0.27%, at 717.64, while the Dow sunk 136.54, or 1.06%, to 12,730.24

Credit concerns were reignited after insurance juggernaut AIG (NYSE:AIG) reported a record loss after Thursday’s close, signaling that outside of Wall Street credit conditions have tightened further and the credit tempest isn’t showing signs of letting up.

“[AIG’s earnings] underscore that the credit crunch is ongoing,” said Andy Busch, foreign exchange strategist for BMO Capital Markets, in an interview. “I think we had gone through a period in which the earnings didn’t seem so bad and [now] we are getting earnings that are much larger as far as write downs go. People get nervous … when you have an earnings shock to any company.”

Compounding concerns, oil continued its skyward climb, hitting $126 a barrel midmorning on concerns that Venezuela could cut oil exports. Since then, oil has pulled back slightly to roughly $125 a barrel midday. Over the course of the . . .

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