Tag -  IRW 

The Russell 2000 (NYSE: IWM) fell today as economic worries and concerns about the U.S. housing sector took to the forefront. The small-cap index dropped 14.87 points, or 1.97%, to 739.06. The Dow Jones Industrial Average (INDU) let go 172.65 points, or 1.29%, to 13,167.20.

On a year-to-date basis, the Russell 2000 is down 6.14%, while the Dow has gained 5.55% and the S&P 500 has advanced 2.07%.

The U.S. housing sector continues to agonize financial institutions with bets on securities backed by subprime mortgages and will probably continue reporting losses; the overall economic situation is not rosy.

That’s what we found out today, so it’s no doubt the bears dominated trading.

Stocks fell out of the opening on news that Citigroup Inc. (NYSE: C) announced has lowered its ratings on nine U.S. banks. The New York-based company, the largest U.S. bank, said that it expects those banks to see more losses stemming from the purchase of securities backed by subprime mortgage loans.

Home prices began to stagnate in the second half of 2006, leading to a wave of foreclosures and delinquencies as cash-strapped borrowers were unable to pay their mortgages. The squeeze was hardest on those with poor credit histories who took advantage of lax lending standards and secured loans that quickly overwhelmed their ability to make payments.

The housing situation is not getting any better.

The National Association of Homebuilders reported that builder confidence in the market for new single-family homes remained at a record low for a third consecutive month in December. The NAHB/Wells Fargo Housing Market Index stayed at 19 this month, its lowest level since the measure was introduced in 1985.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are falling on news that U.S. home builder confidence remains low. At 2:58 p.m. ET, the small-cap index was down 10.06 points, or 1.33%, to 743.87. The Dow Jones Industrial Average (INDU) had retreated 159.08 points, or 1.19%, to 13,180.77.

The bears have been running the show today, ever since Citigroup Inc. (NYSE: C) announced before the start of trading that it has lowered its ratings on nine U.S. banks. The New York-based company, the largest U.S. bank, said that it expects those banks to see more losses stemming from the purchase of securities backed by subprime mortgage loans.

The financial sector has been bleeding in the wake of the meltdown in the subprime sector, which started this summer. Home prices began to stagnate in the second half of 2006, leading to a wave of foreclosures and delinquencies as cash-strapped borrowers were unable to pay their mortgages.

Speaking of the housing sector, the picture remains dire.

Builder confidence in the market for new single-family homes remained at a record low for a third consecutive month in December, according to the National Association of Homebuilders after the start of trading.

The NAHB/Wells Fargo Housing Market Index stayed at 19 this month, its lowest level since the measure was introduced in 1985. Readings below 50 indicate that more builders view market conditions as poor rather than favorable.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are in negative territory on more credit worries
 
At 11:06 a.m. ET, the small-cap index was off 4.68 points, or 0.62%, to 749.25. The Dow Jones Industrial Average (INDU) had dropped 47.23 points, or 0.35%, to 13,292.62.

Citigroup Inc. (NYSE: C), the largest bank in the United States, woke up the bears before the start of trading when it announced that it has lowered its ratings on nine U.S. banks. The New York-based company said that it expects those banks to see more losses stemming from the purchase of securities backed by subprime mortgage loans.

In economic news, the U.S. Commerce Department reported before the start of trading that third-quarter current account deficit fell to $178.5 billion from a downwardly revised $188.9 billion in the second quarter.