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Friday, April 18, 2008 7:32:24 AM
Update ABK
Following the Purge of Amabak in late 2007 (NEW YORK, Dec 19 (Reuters) - U.S. stocks fell on Wednesday after Standard & Poor's downgraded its rating outlook on several bond insurers, suggesting further potential turmoil in the financial sector.
The stock market erased its morning gains after S&P cut its outlook for both AMBAC Financial Group Inc (ABK.N: Quote, Profile, Research) and MBIA Inc (MBI.N: Quote, Profile, Research), suggesting their "triple-A" credit ratings are at risk. S&P also cut its rating on ACA Financial Gauranty Corp ACAH.PK to junk and said it may cut the triple-A rating of Financial Guaranty Insurance Co.
"Institutional investors can only buy the bonds if they're insured and if the credit quality of the insurer is high enough. If the credit rating is lowered by S&P, then some investors will be required to sell bonds and other asset-backed securities," said Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York.
"It's bad for stocks because if it's difficult for companies and municipalities to raise money in the credit markets, then the economy, which runs on money and credit, will be hurt," Johnson said.
The Dow Jones industrial average .DJI was down 37.56 points, or 0.28 percent, at 13,194.91. The Standard & Poor's 500 Index .SPX was down 3.78 points, or 0.26 percent, at 1,451.20. The Nasdaq Composite Index .IXIC was down just 0.23 of a point or 0.01 at 2,595.80.
MBIA's shares slid 10.5 percent to $24.78 and AMBAC Financial's stock lost 6.6 percent to $25.20), mtcinc0 posted ABK as a possibility on Mar.22, 2008.
It now appears like it may want to turn, although MFI hasn't impressed me yet. Some of these lenders may NEVER come back, at least in their present form.
Following the Purge of Amabak in late 2007 (NEW YORK, Dec 19 (Reuters) - U.S. stocks fell on Wednesday after Standard & Poor's downgraded its rating outlook on several bond insurers, suggesting further potential turmoil in the financial sector.
The stock market erased its morning gains after S&P cut its outlook for both AMBAC Financial Group Inc (ABK.N: Quote, Profile, Research) and MBIA Inc (MBI.N: Quote, Profile, Research), suggesting their "triple-A" credit ratings are at risk. S&P also cut its rating on ACA Financial Gauranty Corp ACAH.PK to junk and said it may cut the triple-A rating of Financial Guaranty Insurance Co.
"Institutional investors can only buy the bonds if they're insured and if the credit quality of the insurer is high enough. If the credit rating is lowered by S&P, then some investors will be required to sell bonds and other asset-backed securities," said Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York.
"It's bad for stocks because if it's difficult for companies and municipalities to raise money in the credit markets, then the economy, which runs on money and credit, will be hurt," Johnson said.
The Dow Jones industrial average .DJI was down 37.56 points, or 0.28 percent, at 13,194.91. The Standard & Poor's 500 Index .SPX was down 3.78 points, or 0.26 percent, at 1,451.20. The Nasdaq Composite Index .IXIC was down just 0.23 of a point or 0.01 at 2,595.80.
MBIA's shares slid 10.5 percent to $24.78 and AMBAC Financial's stock lost 6.6 percent to $25.20), mtcinc0 posted ABK as a possibility on Mar.22, 2008.
It now appears like it may want to turn, although MFI hasn't impressed me yet. Some of these lenders may NEVER come back, at least in their present form.
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