Residential Construction, Financial Companies Have Tough Day on Wall Street
- Feb 05, 2008
New York–Financial and homebuilder stocks declined Monday as news of the weakening employment sector increased fears that consumer credit will continue downward, the Financial Times reports.Concern that rising loan delinquencies and falling home prices would dampen corporate earnings didn’t help; retail stocks also lost ground as investors looked to sell after last week’s jobs report, which indicated a U.S. recession has become more of a reality.Mid-Monday, the S&P 500 was down 0.8 percent at 1,384.81. The homebuilder sector was down by 5.3 percent and the financial sector by 2.2 percent. The Nasdaq Composite dropped 0.8 percent to 2,393.33; the Dow Jones Industrial Average fell 0.6 percent to 12,663.37.Wachovia and Wells Fargo saw some of the biggest drops–7.7 percent and 6.8 percent–once Merrill Lynch advised its investors to sell the financial stocks because of their exposure to the housing market. UBS also told investors on Monday to sell shares of American Express, Capital One Financial and Discover Financial Services. Credit card companies are forecast to see increased consumer finance losses.