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Last Updated: Thursday, 23 August 2007, 20:38 GMT 21:38 UK
Wall Street shares decline again
Traders on the New York Stock Exchange
Investors remain nervous
US stocks ended lower on Thursday after the head of the country's largest mortgage lender warned that the housing market slump could spark a recession.

Following the comments of Countrywide boss Angelo Mozilo, the Dow Jones index finished down 0.4 points to 13,236.

Market confidence was also hit by the Federal Reserve putting a further $17bn (8.6bn) into the financial system.

The Fed has now placed $120.5bn of funds to ease fears of a credit squeeze led by the sub-prime mortgage crisis.

I've seen this movie before, and the ending of the movie always ends up in some form of recession
Countrywide boss Angelo Mozilo

The two other main US share indexes also fell on Thursday, with the Nasdaq dropping 11 points to end at 2,542, and the Standard & Poor's 500 losing 1.6 points to 1,463.

'Not getting better'

Mr Mozilo said in an interview that the US housing slump, centred on record defaults in the sub-prime mortgage sector, was "certainly not getting better".

"I've seen this movie before, and the ending of the movie always ends up in some form of recession," he said.

Despite the falls on Wall Street, the main European share indexes had earlier closed up on Thursday.

London's FTSE advanced one point to 6,197, while Frankfurt's Dax added 11 points to 7,512.

Prior to that, Japan's benchmark Nikkei index had closed up 2.6%, while China's main stock index hit another record high.

'Ongoing volatility'

After several days of gains earlier this week, analysts had begun to hope that the worst of the recent market turmoil may be over.

Yet Tony Russell, senior equities adviser at ABN AMRO Morgans, cautioned that volatility is likely to continue for some time.

"The market is getting more comfortable...but confidence can certainly be shattered by any more revelations," he said.

The recent market turbulence has centred the US sub-prime mortgage sector, while gives loans to people with poor credit history.

Sub-prime default levels have risen to record highs over the past year in the face of higher US mortgage rates, raising fears that this could hamper credit availability in the broader market, beyond the home loan sector.

On Wednesday, Countrywide had cheered investors after Bank of America said it planned to invest $2bn in the firm.


FTSE 100
23.70 0.44%
19.54 0.34%
Cac 40
14.48 0.38%
Dow Jones
78.53 0.76%
35.31 1.58%
S&P 500
11.22 1.02%
BBC Global 30
20.65 0.36%
Data delayed by at least 15 minutes

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