Since the Dow Jones Industrial Average hit it's all-time high on July 19th of 14,000 it has lost 1000 points because of concerns about credit conditions and the ongoing housing slump. The turbulence continued today as the Dow opened up with a 223 point loss before pairing back some of its losses.
Today's sell-off was due to the fact that BNP Paribas, France's largest bank, said it was freezing three funds because current conditions make it impossible to value their assets, which was touched off by problems in the U.S. subprime market. Just last week, Chief Executive Officer Baudouin Prot said the bank's exposure to U.S. subprime was "absolutely negligible'', very small or insignificant, when the company reported a 20% increase in second-quarter net income.
To make matters worse for stock markets, Home Depot, the world's largest home-improvement retailer, said it may have to cut its $10.3 billion price for the contractor unit it agreed to sell to buyout firms in June. Home Depot also stated that it reduced the amount it's willing to pay in a tender offer for 250 million of its own shares.
Brought to you, courtesy of The Mortgage Market Guide
