( CFC) dragged on financial stocks Monday, after ratings agencies expressed concern about the lender's debt and an analyst said
Bank of America
should "walk away" from their proposed deal.
A Friedman, Billings Ramsay analyst suggested BofA should at least lower its offer price for Countrywide. Meanwhile, Standard & Poor's on Friday downgraded the lender's debt to junk status, and Fitch Ratings on Monday put the lender's debt on its "Rating Watch Evolving" list. The stock tanked closed down 62 cents, or 10.4%, to $5.36.
Other mortgage lenders, like
fell on the news, losing 7.9% to $11.22. The
Financial Sector Index declined 69.99 to 7,902.48.
In other lender news, Rep. Barney Frank (D., Mass.) expressed concern about reports that people are having difficulty obtaining a jumbo mortgages, even after Congress changed rules that were supposed to loosen the market for big loans. He said he will hold a hearing on May 21 to question mortgage bankers and government-sponsored entities like
( FNM) and
( FRE). Freddie Mac gave back 5.8% to $25.52 and Fannie Mae was trading at $28.29, a loss of 4.1%.
Shares of bond insurers
dropped 8.9% to $4.90 and
closed down 8.5% to $34.57, after rival
said it had received proposals to assist the company in raising capital. Goldman Sachs is helping FGIC get capital to keep the company going. It was also reported on Monday that
holds a 6.9% stake in Ambac.
American Insurance Group
gave back $1.65 to $47.39.
One of the few winners on the day was student lender
. The company, which has struggled ever since the non-profit agency that guarantees it loans declared bankruptcy, announced that it was cutting half of its work force and slashing operating costs by $200 million. The stock ended the day up 4.7% to $4.04.