US stocks fell Tuesday as the Federal Reserve's rate setting Federal Open Market Committee (FOMC) began two days of deliberations on monetary policy.
The Dow Jones Industrial Average fell 49 points, or 0.38 at 12823. Component drugs firm Merck fell 9.53% after the Food and Drug Administration (FDA) rejected the company's anti-cholesterol drug Cordaptive, a key drug in its pipeline.
The technology-focused Nasdaq Composite Index fell 0.4%, or 8.99 points, at 2415.41 and the Standard & Poor's 500 was recently down 0.6%, or 7.91 points, at 1388.46.
US Conference Board Consumer Confidence Index fell further in April
US home foreclosures/loan defaults more than doubled in the first quarter - up 112% from the first quarter of 2007; One in every 54 Nevada households received a foreclosure filing during the first quarter
S&P/Case-Shiller Home Price Indices: Steep declines in US Home Prices continued in February 2008; Las Vegas down 23% and Miami down 22% in past year
Up to half of US subprime and Alt-A mortgages made in 2006 and 2007 may be ``underwater'' or close to it by July putting about $800 billion of debt at greater risk of default, according to Barclays Capital.
Subprime loans from the period that are underwater - the value of the loan exceeds the home - jumped 5 percentage points to 19.8% in the fourth quarter, and may reach 26% by midyear if property-price drops continue at the same pace, analysts Ajay Rajadhyaksha and Derek Chen wrote in a report that was issued on Monday. Such Alt-A loans, a grade above subprime, would grow to 23% from 16.3%.
The analysts say that many of the loans that are or will soon be underwater are in areas where prices are falling faster than the US average, so the size of the shift is underappreciated. The odds that a borrower will default, saddling lenders and bond investors with losses, rises when a homeowner owes more on a property than it can sell for, they wrote.
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European stocks fell Tuesday and the Dow Jones 600 closed down 0.9%.
National benchmarks fell in 15 of 18 Western European markets. France's CAC lost 0.7% as did Germany's DAX. The UK's FTSE 100 fell 0.1%.
In Dublin, the ISEQ Index rose 0.13%.
FBD Holdings fell 8.59 % after Dutch insurer Euroko withdrew its bid offer.
Icon rose 4.75% after reporting that net revenues for the quarter were $201.3 million, representing a 48% increase over net revenues of $136.1 million for the comparative quarter last year.
Income from operations was $21.5 million or 10.7% of revenue, compared to $14.7 million or 10.8% for the same quarter last year. Net income was $16.9 million or 56 cents per share on a diluted basis, compared with $12.3 million or 42 cents per share last year.
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