Associated Press
Tuesday, July 15, 2008
NEW YORK, July 14 -- Wall Street extended its slump into yet another week Monday as investors worried that even a safety net set up for mortgage financiers Fannie Mae and Freddie Mac won't head off further trouble in the markets.
The Dow Jones industrial average fell 45.35, or 0.41 percent, to 11,055.19 after spiking nearly 140 points in early trading. The Standard & Poor's 500-stock index fell 11.19, or 0.90 percent, to 1228.30, and the Nasdaq composite index fell 26.21, or 1.17 percent, to 2212.87.
Investors' latest unease about the banking sector comes as many financial firms are to issue quarterly reports, many of which will probably include sizable write-downs of souring mortgage debt.
The Treasury and the Federal Reserve said Sunday that they would aid Fannie Mae and Freddie Mac if needed. Wall Street has been on edge about the well-being of those companies because they together hold or back $5.3 trillion of mortgage debt, about half the outstanding mortgages in the United States. Washington's efforts to shore up confidence in Fannie Mae and Freddie Mac at times helped those shares Monday, but troubles arose in other parts of the financial sector.
Investors worried about a run on IndyMac Bancorp that led to the bank's takeover by the government Friday. IndyMac is the largest regulated thrift to fail.
Trading in shares of regional bank National City was briefly halted as the company responded to rumors about financial troubles. The bank said in a statement that it was experiencing "no unusual depositor or creditor activity" and that as of Friday's close it had more than $12 billion of excess short-term liquidity.
Anheuser-Busch agreed to a sweetened $52 billion takeover bid from Belgian brewer InBev.
Yahoo revealed Saturday that it had rejected Microsoft's latest attempt to acquire its online search engine.
Movers
Fannie Mae fell 52 cents, to $9.73.
Freddie Mac lost 64 cents, to $7.11.
National City slid 65 cents, to $3.77.
Anheuser-Busch rose 37 cents, to $66.87.
Yahoo fell $1, to $22.57.
Microsoft slipped 14 cents, to $22.57.
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