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Margin calls, weak jobs data send financials down again

NEW YORK (MarketWatch) - Shares of U.S. financial stocks fell sharply for a second straight session Friday as turmoil in the credit markets sparked margin calls and the latest jobs data hinted strongly that the nation’s economy is recession-bound. The Financial Select Sector SPDR , an ETF that tracks the financial stocks in the S&P 500, sank 5% in early trade. The iShares Mortgage REIT ETF , which tracks performance of firms that invest in mortgage backed securities fell also. Margin calls are tearing through the sector, as the value of securities bought with borrowed money plummets, and lenders demand more collateral to cover loans. That, in turn, is forcing borrowers to sell assets and further pressuring prices. And, in the clearest suggestion yet of a recession, U.S. nonfarm payrolls fell by 63,000 in February, the second straight decline, the Labor Department reported Friday.
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This entry was posted on Friday, March 7th, 2008 at 9:37 am and is filed under Daily Forex Analysis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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