Stock futures fell Wednesday as Wall Street appeared poised for another decline due to ongoing worries about U.S. home loans and the credit market as a whole.
The National Association of Realtors reports pending sales of existing homes in June – data which could help investors better gauge the U.S. housing market’s weakness. The Mortgage Bankers Association said early Wednesday that its index of home loan applications slipped last week for the second straight week.
On Tuesday, Wall Street resumed the sharp slide it began last week, as concerns about home loan defaults re-emerged when American Home Mortgage Investment Corp. reported troubles with its credit lines. The Dow Jones industrials tumbled nearly 150 points, prompting investors to turn to government bonds as a safer investment.
Adding to that anxiety Wednesday, The Wall Street Journal, citing anonymous sources, reported that Bear Stearns Cos. – which riled the markets weeks ago when it shut two hedge funds that bet on risky home loans – now faces big losses in a third fund with about $900 million in mortgage investments. (MORE)
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