Subprime Woes Slam Stocks Again
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After six months of turmoil in the financial markets, investors seem no closer to becoming immune to news of the subprime mortgage mess, as rising defaults at American Express and a lower than expected takeover price for Countrywide Financial sent stocks skidding once again on Friday.
The major indexes lost nearly 2% on fears that more interest rate cuts from the Federal Reserve may arrive too late for an economy that already appears to be sliding into recession.
With earnings reports coming next week from major banks, Intel and IBM, along with wholesale and consumer inflation data, more volatility could be in store for investors.
Amazon fell 4% on consumer spending worries, and RF Micro Devices, Interactive Intelligence and Opnext tumbled after lowering financial guidance.
Research in Motion lost 7% on a downgrade, and Apple shed 3% ahead of next week's Macworld conference.
Juniper fell 13% after its COO departed for Microsoft.
AMD added another 5% on a New York antitrust probe of Intel, which lost 2.4%.
The Nasdaq fell 48 to 2439, the S&P lost 19 to 1401, and the Dow tumbled 246 to 12,606. Volume declined to 4.47 billion shares on the NYSE, and 2.4 billion on the Nasdaq. Decliners led by a 21-11 margin on the NYSE, and 21-8 on the Nasdaq. Downside volume was 73% on the NYSE, and 78% on the Nasdaq. New highs-new lows were 41-216 on the NYSE, and 55-301 on the Nasdaq.