U.S. stocks fell as investors faced more credit market problems, rising estimates of losses, and worries related to the growing concerns to the wider economy.

Citigroup analysts estimated that UBS may face additional 12.5 billion francs to 20 billion francs of asset write-downs and losses related to leveraged loans and mortgage securities in 2008. The news on the losses left market uncertain and UBS fell 3%.

UBS analyst Philip Finch based in London said that more bank losses may be reported in the months to come. He estimated, and as reported on Bloomberg and Reuters, that additional losses of $120 billion in Collateralized Debt Obligations, $50 billion in structured investment vehicles known as SIVs, $18 billion in commercial mortgage securities, and $15 billion in leveraged buyouts related loans. The news sent market averages lower immediately.

The fearful market expects that similar level of losses may be reported by Citigroup, Merrill Lynch, Morgan Stanley, and other international banks. The growing uncertainty in the credit market is roiling market sentiment and stock market averages are caught in a trading range.

Separately the Federal Reserve of New York reported on its website that the economic conditions in the region have drastically changed according to the latest survey. The release stated the following paragraph.

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers deteriorated in February. The general business conditions index tumbled nearly 21 points to -11.7, falling below zero for the first time since May 2005. The new orders and shipments indexes also dropped into negative territory. The prices paid index rose for a second consecutive month, to its highest level in considerably more than a year, while the prices received index remained elevated but close to January’s level.

The U.S. Import Price Index increased 1.7% in January, the Bureau of Labor Statistics of the U.S. Department of Labor reported today, led by a 5.5% increase in petroleum prices. The overall increase followed a 0.2% decline in December. U.S. export prices advanced 1.2% in January following a 0.4% rise in December.

New York State Insurance Department said that FGIC Corp, the bond insurer requested to split its municipal bond business from the structured financing business. Of the total of $310 billion in debt insurance, $220 billion are related to municipal bonds covering schools and local government requirements.

5:00AM New York, 7:00PM Tokyo – The Bank of Japan left the key interest rate at 0.5% but expresses a concern on the rising food and energy prices.

Stock indexes in Japan tumbled from a 4.27% advance yesterday to close down on resurgent fears that subprime-related losses will widen and on a government report that noted that the pace of growth seems to be slowing as a result of dropping housing investment.

In Tokyo trading Nikkei 225 slipped 0.03% or 3.89 to 13,622.56, and the Topix Index rose 0.2% or 1,334.89.

In the first section of the Tokyo Stock Exchange 9.6 million shares valued at 1 trillion yen changed hands and in the second section 300 million shares valued at 3 billion yen changed hands.

Of the Nikkei 225 stocks 122 gained, 97 declined and 16 were unchanged. Pioneer Corp led the advancers with a rise of 15.53% followed by Showa Shell gaining 9.97%.

Bank of Japan Holds Rates

The Bank of Japan announced on its website today that it had unanimously voted to keep its key interest rate unchanged at 0.5%. In the previous two votes Atsushi Mizuno had disagreed with other members.

Economy Slows on Drop In Housing Investment

Separately, the bank also reported in its recent report on economic and financial developments published today that the country’s economy seems to be slowing due to the drop in housing investment.

The bank also noted that public investment has remained sluggish and housing investment has declined substantially.

Japan''s economy is expanding moderately as a trend, although the pace of growth seems to be slowing on the downturn in housing investment, while production is expected to be flat in the short run.

BOJ forecasts that domestic corporate goods prices will continue rising as international commodity prices continues to rise.