US stocks plummet on new mortgage crisis fears

July 10th, 2008 - 7:05 am ICT by IANS  

New York, July 10 (DPA) Major US stock indices fell sharply Wednesday on technology sales warnings and fresh concerns of more mortgage-related losses for financial firms. Government-chartered lenders Fannie Mae and Freddie Mac plunged to 16-year share-price lows on renewed warnings that they lack enough capital to keep their operations running.

The condition of the two largest US home-loan providers has ignited fears of another batch of mortgage-related writedowns and led a sharp drop in financial shares.

“Everybody thought the worst of the writedowns were passed in April. And behold, here we are now, and that wasn’t the case,” Nick Sargen, chief investment officer of Fort Washington Investment Advisors, told Bloomberg Television.

Technology shares were led lower by Cisco Systems Inc and Intel Corp after analysts predicted slowing sales for the two bellwether technology companies.

The blue-chip Dow Jones Industrial Average plummeted 236.77 points, or 2.08 percent, to 11,147.44. The broader Standard & Poor’s 500 Index was down 29.01 points, or 2.28 percent, to 1,244.69. The technology-heavy Nasdaq Composite Index declined 59.55 points, or 2.6 percent, to 2,234.89.

The US currency fell to 63.52 euro cents from 63.84 euro cents on Tuesday and dropped to 106.72 yen from 107.42 Japanese yen.

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