Updated from 1:57 p.m. EDT
Stocks on Wall Street were trading lower Monday as reminders of the ongoing housing and credit crises mixed with earnings from several big Wall Street names.
Dow Jones Industrial Average
was shedding 169 points to 11,202, and the
gave up 14 points to 1244. The
slipped 35 points to 2275.
Over the weekend, a slew of corporate news emerged to help set the tone for Monday's trading. In a new development for the ongoing credit crisis, the government said last Friday that it had
, First National Bank of Nevada and First Heritage Bank of Newport Beach California. The Federal Deposit Insurance Corporation is backing the banks' deposits.
Meanwhile, Congress on Saturday
that would help homeowners refinance their mortgages and prop up battered government-sponsored entities
Speaking Monday afternoon in Washington, D.C., Treasury Secretary Henry Paulson introduced a plan to help develop covered bonds -- a potentially less-risky instrument for securitizing mortgages and other assets -- in the U.S. Paulson said that though covered bonds alone won't fix the housing market, they will boost mortgage financing.
The crisis in the housing market is creating concerns about the overall economy, said Bob Andres, chief investment strategist at Portfolio Management Consultants.
"I think what you're seeing is a continuation of uncertainty," said Andres, saying last week's rally in equities was short-covering. "I don't think the general public truly understands the size and magnitude of the housing crisis," he said.
Following the weekend's regional bank news, Andres said "the regional banks in my judgment are much more vulnerable at this point in time." He said the press has been focusing too much on the dangers of subprime mortgages. "What did IndyMac own? They didn't own subprime, and they went out of business. They owned Alt-A paper. And Alt-A is six times the size of subprime market."
Andres said that homeownership, at 67.8% in March, is still high compared with its late-1990s low of about 65.5%. Declines in home prices will impact mortgage-backed securities, opening up the possibility of more writedowns. "There's so much uncertainty here."
Andres also said that if oil continues to reverse, the dollar strengthens, and the Fed shows signs that it is not intent on raising rates, those events would have a positive impact on stocks.
However, said Andres, housing "Was the epicenter, is the epicenter, and will be until we get back to ownership rates that make sense."
XM Satellite Radio
on their long-awaited merger deal.
The Wall Street Journal
reported Sunday that
Kohlberg Kravis Roberts
New York Stock Exchange
As earnings season continues to chug along, foodmaker
reported a year-over-year increase in profits, beating expectations.
, on the other hand, saw profits decline and fall short of estimates on rising chicken costs.
Wireless telecom company
announced second-quarter earnings that, excluding charges,
. Revenue, however, fell short of the Street's forecasts.
Away from earnings, automaker
said it would scale back production for 2008 as it deals with soft U.S. demand.
British-based diversified consumer company
said it was selling its laundry detergent business to private-equity firm Vestar Capital Partners for $1.45 billion.
In the pharmaceuticals space,
announced late Friday that its osteoporosis drug denosumab had
, sending shares up 15% early Monday.
As for commodities, crude oil was climbing $1.49 to $124.75 a barrel. Gold was ticking up $2.10 to $939.90 an ounce. On Friday, the national average gasoline price dipped below $4 a gallon for the first time since May and was recently at $3.97 a gallon.
Treasury prices were recently rising. The 10-year note was up 18/32 to yield 4.02%, and the 30-year was up 1-2/32, yielding 4.62%. The dollar was slipping against the euro, the yen and the pound.
In global markets, the FTSE in London and the DAX in Frankfurt were weaker, as was the Hang Seng in Hong Kong. Japan's Nikkei, on the other hand, was rising.