Oct. 14 (Bloomberg) -- Bank of America Corp., Citigroup Inc. and H&R Block Inc. plunged, leading a drop in financial stocks, on escalating concerns that faulty handling of home loans and foreclosures will fuel costs.
H&R Block dropped $1.23, or 9 percent, to $12.46 at 2:22 p.m. in New York, the third-biggest decline among stocks in the S&P 500 Index. Bank of America slid 5.8 percent, Wells Fargo & Co. dropped 4.8 percent, and Citigroup dropped 5.5 percent. Charlotte, North Carolina-based Bank of America and New York- based JPMorgan Chase & Co., which fell 4.1 percent, were todayâs worst performers in the 30-member Dow Jones Industrial Average.
âYou have a new cloud forming on the horizon which could be anything from something minor to something that really slows down the processâ of foreclosures, said Benjamin Wallace, an analyst at Grimes & Co. in Westborough, Massachusetts, which manages about $900 million and owns stock in JPMorgan and Wells Fargo. âThere was some certainty coming back but this mortgage stuff has just reversed that.â
The declines reflect uncertainty about costs that banks might bear on so-called mortgage put-backs from investors or insurers who challenge the loans as well as uncertainty about the potential costs of legal challenges to foreclosures, analysts said. Bank of America Chief Executive Officer Brian T. Moynihan, speaking at a conference in Boston, said the marketâs volatility is unprecedented.
âNothing Differentâ
âThereâs nothing different about our company today than yesterday,â he said. âIâm not sure it is justified.â
The Association of Financial Guaranty Insurers, a trade group for bond insurers, said in a letter last month to Moynihan that his bank should repurchase as much as $20 billion in home loans that were based on wrong or missing information. MBIA Inc., the worldâs biggest bond insurer, rose as much as 16 percent to $12.95, the highest level in more than two years, after climbing 4.6 percent yesterday. Ambac Financial Group Inc. jumped as much 21 percent today, and Assured Guaranty Ltd. rose as much as 8.7 percent.
http://noir.bloomberg.com/apps/news?pid=20601087&sid=a1pgKicnKB9k&pos=5
H&R Block dropped $1.23, or 9 percent, to $12.46 at 2:22 p.m. in New York, the third-biggest decline among stocks in the S&P 500 Index. Bank of America slid 5.8 percent, Wells Fargo & Co. dropped 4.8 percent, and Citigroup dropped 5.5 percent. Charlotte, North Carolina-based Bank of America and New York- based JPMorgan Chase & Co., which fell 4.1 percent, were todayâs worst performers in the 30-member Dow Jones Industrial Average.
âYou have a new cloud forming on the horizon which could be anything from something minor to something that really slows down the processâ of foreclosures, said Benjamin Wallace, an analyst at Grimes & Co. in Westborough, Massachusetts, which manages about $900 million and owns stock in JPMorgan and Wells Fargo. âThere was some certainty coming back but this mortgage stuff has just reversed that.â
The declines reflect uncertainty about costs that banks might bear on so-called mortgage put-backs from investors or insurers who challenge the loans as well as uncertainty about the potential costs of legal challenges to foreclosures, analysts said. Bank of America Chief Executive Officer Brian T. Moynihan, speaking at a conference in Boston, said the marketâs volatility is unprecedented.
âNothing Differentâ
âThereâs nothing different about our company today than yesterday,â he said. âIâm not sure it is justified.â
The Association of Financial Guaranty Insurers, a trade group for bond insurers, said in a letter last month to Moynihan that his bank should repurchase as much as $20 billion in home loans that were based on wrong or missing information. MBIA Inc., the worldâs biggest bond insurer, rose as much as 16 percent to $12.95, the highest level in more than two years, after climbing 4.6 percent yesterday. Ambac Financial Group Inc. jumped as much 21 percent today, and Assured Guaranty Ltd. rose as much as 8.7 percent.
http://noir.bloomberg.com/apps/news?pid=20601087&sid=a1pgKicnKB9k&pos=5