Another ugly day of negative housing & mortgage problems is sinking stocks. Dow is down 45, decliners over advancers 2-1 while NAZ is essentially even. There are so many problems, tough to decide where to begin. Fannie Mae (FNM), a government-sponsored company & largest holder of mortgages, reported a $2+B loss. They are cutting the div & seeking $6B in outside financing. But the stock is taking the news well, little changed after falling sharply on the opening. They give a very gloomy outlook for housing & mortgages for the rest of 2008. UBS (UBS), the Swiss bank, was down 91¢ on news about laying off 5½K staff after writing down billions in mortgages & loans. They claim the mortgage market is recovering because they feel good about selling $22B in mortgages to BlackRock (BLK), down 3.06, for (only) $15B.
D.R. Horton (DHI), the nation's largest home builder, reported a 1.3B loss in Q2 (quarter just ended) as revenue plunged 40% from the prior year's qtr. Much of their loss was related to write down of assets. Analysts had been forecasting a loss of 39¢ vs the $4.14 loss. Their backlog of homes under contract declined to 2.1B down from 4.8B in the prior year.
Meanwhile oil reached another record, going over 122. Commodities have gotten a new breath of life after last week's fall as the dollar weakens again. In just a few days, the value of the Euro declined to about 1.53 and is now nearing 1.55 after a recent high of 1.60+. Economists are talking about further weakening in the dollar, not good for stocks. Some of the strength in commodities will mean money is taken out of stocks.
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