Saturday, July 12, 2008

Mortgage Crisis Slams Wall Street

According to, the stock market had record drops today as Dow went below 11,000 for the first time in nearly two years.

“The Dow Jones industrial average (INDU) lost over 200 points, or 1.9%. The Standard & Poor's 500 (SPX) index and the tech-heavy Nasdaq composite (COMP) both fell at least 1.7%.

Fannie Mae (FNM, Fortune 500) fell around 30% and Freddie Mac (FRE, Fortune 500) fell 33%, adding to the weeklong battering for the government-sponsored mortgage backers amid worries about their ability to stay afloat.

As speculation grows about government intervention, Treasury Secretary Henry Paulson said Friday morning that the government is focused on assuring the health of the two companies. Fannie and Freddie trimmed losses on his comments, but remained deep in the red.

Lehman Brothers (LEH, Fortune 500) lost another 19% amid continued uncertainty about the brokerage's solvency since it reported a nearly $3 billion second-quarter loss last month. (Full story).”

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