Sector Snap: Building Materials Stocks Fall

NEW YORK (AP) — Shares of building materials suppliers fell Monday on pessimism about consumer spending and a record-high number of mortgages that are not being paid.

Data provided by credit reporting agency TransUnion showed the ratio of mortgage holders who are 60 days or more behind on their payments increased for the 10th straight quarter, to 5.81 percent nationwide for the three months ended June 30.

That's up 65 percent, from 3.53 percent, in the 2008 second quarter.

Delinquency of 60 days is considered a precursor to foreclosure, because of the difficulty homeowners would have coming up with two back payments to bring themselves current.

The record-high number of mortgage failures is a disincentive to bankers who ultimately get stuck with non-performing loans, whether those loans are to home buyers or home builders. And as bankers loan less to builders, demand for building supplies declines.

Building materials suppliers also declined with the broader market, weighed down by investor fears about weak consumer spending.

In afternoon trading, Masco Corp. fell 88 cents, or 6.3 percent, to $13.22, USG Corp. declined $1.11, or 7.8 percent, to $13.18 and Beacon Roofing Supply Inc. retreated 88 cents, or 5.5 percent, to $15.17.