Wall St hurt by mortgage worries and risk fears

NEW YORK – US stocks slid on Monday as a worldwide flight from riskier assets moved into a second week, fed in part by heightened concerns about the flagging health of the sub-prime mortgage market.

Lenders to home buyers with poor credit histories were the session’s standout laggards, led by a stunning 70 per cent drop in shares of New Century Financial on fears it could go bankrupt. That spread across the sector, and others sank as well.The stock of Accredited Home Lenders fell 26 per cent and was the No.2 percentage loser on Nasdaq.For much of the session, it appeared as if US large-cap stocks, at least, would dodge the global swoon in equities that has chopped nearly US$2 trillion off the value of stocks worldwide in the past week.But investors capitulated in the last half hour of trading, as traders said the benchmark S&P 500 index fell below a key technical support level.”There’s been a change in psychology and there’s been a change in risk appetite among investors, and we can’t expect the bottom after two weeks,” said Phil Orlando, chief portfolio manager at Federated Investors in New York.The Dow Jones industrial average fell 63,69 points, or 0,3 per cent, to end at 12 050,41.The Standard & Poor’s 500 Index slid 13,05 points, or 0,94 per cent, to finish at 1,374.12.The Nasdaq Composite Index dropped 27,32 points, or 1,15 per cent, to close at 2 340,68.Decliners outnumbered advancers by a ratio of more than 4 to 1 on both the NYSE and the Nasdaq.The Dow’s losses were muted compared with the rest of the market.Some investors ventured back into equities by buying consumer staples and health-care stocks, which are often seen as safer bets in times of turmoil.Large-cap technology stocks, seen likely to have strong earnings growth, also rose.Shares of Apple Inc.rose 1,1 per cent, or 91 cents, to US$86,32, and were the top positive influence on the Nasdaq.But that was offset by a broad decline among sub-prime mortgage lenders as the crisis in the sector escalated.New Century shares plunged 68,9 per cent, or US$10,09, to US$4,56 and topped the Big Board’s list of percentage decliners amid regulatory examinations into the company’s accounting errors and stock trading.Investors were also still reeling from last week’s sell-off.In US economic news, the Institute for Supply Management’s February service sector index was below expectations and down from the January reading, but it still showed further growth in services, the largest segment of the US economy.Volume was heavy on the NYSE, where about two billion shares changed hands, above last year’s estimated daily average volume of 1,84 billion.On the Nasdaq, about 2,33 billion shares were traded, above last year’s daily average of 2,02 billion.Nampa-AFPThat spread across the sector, and others sank as well.The stock of Accredited Home Lenders fell 26 per cent and was the No.2 percentage loser on Nasdaq.For much of the session, it appeared as if US large-cap stocks, at least, would dodge the global swoon in equities that has chopped nearly US$2 trillion off the value of stocks worldwide in the past week.But investors capitulated in the last half hour of trading, as traders said the benchmark S&P 500 index fell below a key technical support level.”There’s been a change in psychology and there’s been a change in risk appetite among investors, and we can’t expect the bottom after two weeks,” said Phil Orlando, chief portfolio manager at Federated Investors in New York.The Dow Jones industrial average fell 63,69 points, or 0,3 per cent, to end at 12 050,41.The Standard & Poor’s 500 Index slid 13,05 points, or 0,94 per cent, to finish at 1,374.12.The Nasdaq Composite Index dropped 27,32 points, or 1,15 per cent, to close at 2 340,68.Decliners outnumbered advancers by a ratio of more than 4 to 1 on both the NYSE and the Nasdaq.The Dow’s losses were muted compared with the rest of the market.Some investors ventured back into equities by buying consumer staples and health-care stocks, which are often seen as safer bets in times of turmoil.Large-cap technology stocks, seen likely to have strong earnings growth, also rose.Shares of Apple Inc.rose 1,1 per cent, or 91 cents, to US$86,32, and were the top positive influence on the Nasdaq.But that was offset by a broad decline among sub-prime mortgage lenders as the crisis in the sector escalated.New Century shares plunged 68,9 per cent, or US$10,09, to US$4,56 and topped the Big Board’s list of percentage decliners amid regulatory examinations into the company’s accounting errors and stock trading.Investors were also still reeling from last week’s sell-off.In US economic news, the Institute for Supply Management’s February service sector index was below expectations and down from the January reading, but it still showed further growth in services, the largest segment of the US economy.Volume was heavy on the NYSE, where about two billion shares changed hands, above last year’s estimated daily average volume of 1,84 billion.On the Nasdaq, about 2,33 billion shares were traded, above last year’s daily average of 2,02 billion.Nampa-AFP