Wachovia Drifts to 12-Year Low; Stocks Fall

123jump.com Staff
20 Jun, 2008
New York City

U.S. stocks fell sharply as financial stocks decline. Rating agency Moodys removed bond insurance companies MBIA and Ambac Financial Group from its top rating. Mortgage lenders Fannie Mae and Freddie Mac declined and leading banks traded lower. Wachovia Bank fell to a 12-year low. Latest read on inflation in India showed annual rate of 11.5%, a 13-year high. Sensex in India plunged 3.5%.

[R]10:00AM New York – Banks and financial stocks fell as housing market continues to decline.[/R]

Financial stocks opened sharply lower in the morning trading as worries related to housing market dominated trading sentiment. On a day when four different contracts in futures and options market are expiring and S&P 500 index at the end of the day will conduct its quarterly rebalancing.

Moody’s lowered its top rating for the bond insurance companies MBIA Inc and Ambac Financial Group. The declining housing market, further weakness in structured finance portfolios and inadequate capital ratios are some of the key factors that contributed to the decision.

Brokers and investment bankers Goldman Sachs, Lehman Brothers, Merrill Lynch and Morgan Stanley fell between 1% and 2%.

Banks dropped at the opening after Merrill Lynch lowered its estimate for leading banks. Wachovia Bank fell to a 12-year low and traded near $17. Wells Fargo, Regions Financial and Bank America fell sharply.

In the European trading market indexes traded lower as inflation and strong euro worries investors. In Asian trading market index in India dropped 3% and in Shanghai dropped more than 10% for the week.

Winnebago Industries, Inc, Motor home maker reported third quarter revenues decreased 39.7% to $139.7 million from $231.7 million a year ago. Net income in the quarter decreased 73.3% to $3.0 million or 10 cents per diluted share compared to net income of $11.3 million or 35 cents per share, a year ago.

Winnebago Industries, Inc ((WGO)) in the last one year traded as high as $32.42 in July 2007 and as low as $12.26 in June 2008. Based on the yesterday’s closing price the company has a market cap of $372.53 million.

World market review

In Tokyo Nikkei 225 Index closed lower 188.09 or 1.33% to 13,942.08, in Hong Kong Hang Seng index decreased 52.01 or 0.23% closed to 22,745.60. In Australia ASX 200 index lower 78.30 or 1.46% to close 5,288.30. In Malaysia KL Composite index increased 10.28 or 0.86% closed to 1,206.67.

In South Korea Kospi Index decreased 9.72 or 0.56% to close at 1,731.00, in Thailand SET index closed higher 26.44 or 3.56% to 768.90 and Indonesia JSE Index edged decreased 1.29 or 0.05% to 2,371.78. Sensex index in India decreased 516.70 or 3.42% to 14,571.29.