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WORLD> America
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Dow drops below 11,000 for 1st time in 2 years
(Agencies)
Updated: 2008-07-12 00:15 Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.83 percent from 3.80 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose. Orlando said investors are looking to Federal Reserve President Ben Bernanke and Paulson for guidance. "It feels like that Friday before the big Bear Stearns/JPMorgan announcement, so you're wondering if Bernanke and Paulson are going to sit around on the weekend trying to figure things out," Orlando said, referring to the near-collapse and subsequent Fed-orchestrated buyout of Bear Stearns. "It seems all the confidence in the market has dissipated in these key financial services companies. When you talk about too big to fail, the government has to step in to figure out a solution to the Fannie and Freddie confidence issue," he said. Freddie Mac fell $2.55, or 32 percent, to $5.45, while Fannie Mae tumbled $3.61, or 27 percent, to $9.59 as investors worried about their stability. Piper Jaffray analyst Robert Napoli lowered his price targets on both companies, and said in a note to clients investors should "not be in a position that only two government-sponsored lenders are willing to make mortgage loans and, without them, our economy would collapse." Lehman Brothers Holdings Inc. fell $3.87, or 22 percent, to $13.43 as traders fretted that the No. 4 investment bank will succumb to soured debt. Citi slipped 31 cents to $15.97 after saying it will book a $4 billion gain from the sale of its German retail operation. The deal is part of a plan by Chief Executive Vikram Pandit to sell up to $500 billion in assets to help boost profitability. |
