The traumatic credit market and increase in home foreclosures are touching down on all areas of the market, including exchange traded funds (ETFs).
Joe Bel Bruno for Associated Press reports that the Dow Jones Industrial dropped 214 points in trading today. The S&P 500 lost 2.20%, while the Nasdaq composite declined 2.30%. The declines sent both the Nasdaq and S&P to 52-week lows.
Credit concerns mounted after Thornburg Mortgage Inc. and Carlyle Group bond fund revealed troubles with investment backed mortgages. The entities failed to make margin calls, which are payments that guarantee much larger debt or investments.
Fourth quarter home foreclosures rose to record levels. Rising defaults have caused lenders to be weary to extend credit, resulting in abnormal credit markets.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.