April 20, 2009
April 20, 2009 by admin
The stock market has sold off sharply on Monday following news from Bank of America and a number of mergers and acquisitions in the technology sector. The stock market was selling off by over 200 points in mid day trading as investors grew nervous from comments that credit conditions continue to be a major concern from Bank of America, despite showing a larger than anticipated quarterly profit. The report from Bank of America has been long anticipated by the market as the company is one of the largest banks and mortgage lenders in the country, and will be a key indicator for a return to the U.S. economy and housing markets.
Bank of America has seen it stock priced jump up by over 200% over the past month as investors saw opportunity when the company was trading for under $3 per share. The companies stock price has dropped sharply, along with other major bank and financial stocks over the past twelve months due to large losses brought on by the fallout in the credit markets. In a seperate report released today, lending for the month of February by banks was lower than expected, despite record low mortgage interest rates, loans for cars, student loans, commercial lending and credit cards are all way below previous levels. If mortgage rates were not trading at historic lows, a number of large banks (Wells Fargo, JP Morgan) would certainly have reported much worse financial quarters for the first quarter of 2009.
The mortgage industry is still benefitting from the challenges in the stock market. The ten year bond was trading at 2.85% on Monday. Fixed rate mortgage loans are well under five percent for fifteen year loan terms and can be structured under five percent for loan terms of thirty years or longer if the borrower is willing to pay discount points. Mortgage rates have trended in their current range for the past 30+ days, and their is little reason to expect any significant changes in the next month as their remains more questions than answers with todays economic climate.