Wall Street Recovering From Mortgage Credit Fears

On Tuesday Wall Street took a tumble as the Dow Jones Industrial Average sank 146.32 points (1.10 percent) to close at 13,211.99.

However, yesterday the stock market fought back a little, with the Dow Jones leading the way, rising 150.38 to 13,362.37a 1.14% gain.

The market is being shaken up my fears in the sub prime mortgage market and the real estate and mortgage markets in general.

Concerns were realised when American Home Mortgage halted trading and then AHM declared insolvency. Consequently the stock plunged 90% in a matter of hours to around a dollar per share.

“It’s again becoming apparent just how disconcerting the underlying concerns about mortgage lending and corporate borrowing have become,” said analysts at Briefing.com.

Inflation is up 0.1% according to official figures but despite this there are still many investors that are very worried about their investments in real estate or mortgage companies and stocks.

What do you think about the mortgage industry at present?

Will the mortgage sector continue to hold the stock market down?

Does Wall Street need the Fed to lower interest rates to spark some growth in the housing market and therefore the mortgage industry?