By Amanda Cooper

NEW YORK (Reuters) - U.S. stocks fell on Friday after Countrywide Financial Corp. became the latest mortgage lender to warn of rising defaults, while chip maker Micron Technology Inc.'s poor forecasts shook the tech secto"" >

 
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1:26PM EST, Sun 11 Feb 2007
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Stocks drop as more home loans go bad; Micron warns

Sat Feb 10, 2007 1:17AM EST
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By Amanda Cooper

NEW YORK (Reuters) - U.S. stocks fell on Friday after Countrywide Financial Corp. became the latest mortgage lender to warn of rising defaults, while chip maker Micron Technology Inc.'s poor forecasts shook the tech sector.

Countrywide, the No. 1 U.S. mortgage lender, said foreclosures hit their highest since at least 2002, while delinquencies hovered near a five-year high, fanning concern over the erosion of the U.S. housing market after two of the top three U.S. subprime mortgage lenders warned on Thursday about the impact of bad loans on their bottom line.

Investors were jolted after Britain's HSBC Holdings Plc and New Century Financial Corp. issued their warnings, which punished shares of major U.S. banks like Citigroup and JPMorgan Chase & Co. for a second day in a row.

The much anticipated market debut of Fortress Investment Group LLC, the first hedge fund to go public, did little to dispel the worries about what further deterioration in the housing market could do to the economy.

""The market was looking for a reason to go down and I guess you could point to that. You could even point to oil trading above $60 a barrel,"" said Angel Mata, managing director of listed equity trading at Stifel Nicolaus Capital Markets in Baltimore.

HSBC ""obviously had an effect on the psychology of the market here,"" Mata said.

Micron said it believes prices for memory chips used in consumer electronics will fall 30 percent to 40 percent this quarter from the last one. That projection sent Micron's stock down more than 3 percent in their biggest one-day percentage slide in more than three months.  Continued...

 

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