March 05, 2007
NEW stock plummets another 69%
FMT down another 33%
LEND off 26%
CFC off 5%
Does anyone else have some serious dot-com deja-vu today?
This meltdown won't stop with subprime and the lenders. Nope, that's not where it ends. That's where it BEGINS.
NEW YORK, March 5 (Reuters) - Shares of New Century Financial Inc. dropped 69 percent on Monday on fears it could go bankrupt as rising concerns about defaults triggered a broad sell-off in the mortgage-lending sector.
Subprime lenders, which make loans to people with poor credit histories, suffered the biggest declines.
But the meltdown also spread to Countrywide Financial Corp, the largest mortgage lender, whose shares fell on concern that even homeowners with good credit scores will miss more payments.
"We think there is further downside risk, possibly to $0," wrote Merrill Lynch & Co. analyst Kenneth Bruce. "Bankruptcy seems a likely course of action."
Many subprime lenders are being forced to buy back loans at a loss, and several have quit the business or have gone bankrupt in the last three months.