Stocks Fall on IMF Warning; Housing Slump Sparks Foreclosures
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American stocks fell as the International Monetary Fund’s warning of “protracted” economic instability sent the Standard & Poor’s 500 Index to the lowest level in a week.
Citigroup Inc., Bank of America Corp., and JPMorgan Chase & Co., the biggest American banks, declined after the IMF said credit markets may not “normalize” soon. Exxon Mobil Corp., the world’s biggest oil producer, led energy companies to the first drop in 10 days after crude prices decreased.
A gauge of homebuilders in S&P indexes dropped to the lowest since May 2003 before data this week on home sales and earnings reports from Lennar Corp. and KB Home.
The S&P 500 retreated 8.02, or 0.53%, to 1517.73. The Dow Jones Industrial Average lost 61.13, or 0.4%, to 13,759.06. The Nasdaq Composite Index slipped 3.27, or 0.1%, to 2,667.95.
The worst housing slump in 16 years is contributing to a surge in foreclosures that has slowed American economic growth and prompted the Federal Reserve to lower interest rates last week. The IMF said in its Global Financial Stability Report yesterday that the turmoil in debt markets “should not be underestimated” and will likely slow global economic growth.
“The market will probably settle down here after its nice run last week,” a manager of about $1.2 billion at Old Second Wealth Management, Mike Morcos, said.
