Financial stocks were sliding again Friday, as continued bad news from the housing market contributed to taking the shine off largely better-than-expected second-quarter earnings reports over the past two weeks.
A report from the Commerce Department Friday showed that sales of new homes fell for the seventh time in the past eight months, as RealtyTrac separately reported that foreclosures in the second quarter more than doubled from the year earlier. Government-sponsored mortgage giants
Fannie Mae (FNM Quote) and
Freddie Mac(FRE Quote) slid on the news. Fannie shed 5.4% to $11.37, and Freddie gave back 6.4% to trade at $8.25.
CNBC reported that
Lehman Brothers(LEH Quote) was considering a sale of its Neuberger Berman asset management unit. If sold, the unit could bring about $8 billion. The stock fell 6.8% to $17.27 as investors showed their displeasure that Lehman would sell one of its most profitable businesses.
Wachovia Bank(WB Quote) tumbled after a Morgan Keegan analyst hit the company with a sell rating and news broke that the CFO Tom Wurtz would be leaving the company. The stock fell 8.6% to $14.34.
Bank of America downgraded Birmingham, Ala.-based bank
Regions Financial(RF Quote) from buy to neutral. The stock continues to be under pressure as the banks struggle to get positive news. The stock fell 10.4% to $9.10.
Similarly,
Washington Mutual(WM Quote) was trying to recover from Thursday's selloff. The stock started the day in negative territory, but was fighting back and was only down 1.5% to $3.97.
Reuters reported on Friday that the cost of protecting Washington Mutual's debt for five years rose to $1.80 million on an upfront basis, plus $500,000 in annual premiums, up from about $1.35 million plus $500,000 annually.
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Debra Borchardt
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