Updated from 2:41 p.m. EDT
Financial stocks were dragged lower with the broad indices amid
disappointing numbers from the housing market: existing-home sales were off 0.2% for July, according to the National Association of Realtors, while inventories of unsold homes climbed 5.1%.
Losing substantial ground on the news was
, shares of which were slammed earlier this month by housing-market worries before picking up last week on a
$2 billion equity infusion from
Bank of America
Lehman Brothers sliced the lender's 2007 earnings target to $1 from $2.80, and Piper Jaffray downgraded the stock to market perform from outperform. Countrywide shares closed down 4.8% to $20 in heavy trading, to retreat ever further from the pop after the BofA news a few days ago.
BofA, meanwhile, slid 1.9% to $50.87 and weighed on the trailing KBW Bank Index, which underperformed the rest of the market with a 1.3% loss at 107.68.
Subprime lenders also took a hit today --
lost 7.5%, and
Accredited Home Lenders
gave up 4%.
fell 6.7% earlier in the day but closed up 26.9% to $1.70, after JMP Securities upped the struggling mortgage-investment firm to market underperform from sell, citing last week's announced letter of intent for a bailout deal with Arco Capital.
Financial Sector Index, which harbors all but one of the above names, surrendered 99.19 points, or 1.1%, to about 9063.
On the brighter side,
Nasdaq Stock Market
climbed higher after
The Daily Telegraph
reported that the exchange might sell its 31% stake in the
London Stock Exchange
to Borse Dubai, its
rival bidder for
. According to sources cited by the paper, a joint bid with Borse Dubai for the Nordic exchange may follow.
announced plans to unload its LSE stake last week. Its stock gained 60 cents, or 1.9%, to $32.01.
Marsh & McLennan
traded up on Friday's postbell announcement that it will buy back $800 million of its shares on an accelerated basis, having struck a deal with a "financial institution counterparty." That represents most of the insurance broker's recent $1.5 billion authorization. Shares added 1% to $26.78 Monday.