Wall Street and exchange traded funds (ETFs) took a step back early this morning after a few worrying developments.
The stability of Lehman Brothers (LEH) came into question, sending their shares as much as 40% lower. Concerns arose over whether the fourth-largest investment bank on Wall Street would be able to raise capital, report Richard Leong and Jonathan Stempel for Reuters. Some of the decline came from reports that Lehman’s talks with state-owned Korea Development bank about a possible infusion had come to an end, but some say the reports are inaccurate.
Pending home sales in July fell more than expected, by 3.2%. The index tracking such sales is now 6.8% below year-ago levels, reports Alan Zibel for the Associated Press. Pending home sales mean the seller has accepted an offer, but the deal hasn’t yet closed.
In positive news for consumers, oil dropped below $105 as Hurricane Ike seemed to back off from the Gulf Coast energy installations, reports Adam Schreck for the Associated Press. Prices also fell back some as Saudi Arabia suggested that OPEC could decide to keep crude output steady.
Some related ETFs heading south this morning include:
- United States Oil (USO), up 13.4% year-to-date
- United States Gasoline (UGA), up 5.8% since Feb. 28 inception
- SPDR S&P Homebuilders (XHB), up 12.3% year-to-date
- iShares Dow Jones U.S. Homebuilders (ITB), up 3.2% year-to-date
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.