The housing market continues to suffer as banks are rightfully tightening borrowing after their lending free for all led to the financial collapse of 2008.
Only 6 more days left for QE2-do you know how much longer your dollar will be devalued?
Today's leading financial stories are:
1) Stocks end another week lower on Europe worries-From the AP
If weak financial results from big tech companies are a sign of what's to come, stock indexes are in for a tough summer.
Stocks fell Friday, giving the market another losing week, after poor earnings reports from two major technology companies suggested that companies invested less in new technology as the economic recovery slowed.
Fears of a spreading European debt crisis also weighed on markets. Italian bank stocks plunged and trading in some of them was halted after Moody's warned that it might downgrade their credit ratings.
"I think it spooked a lot of people," said Frederick Rizzo, who analyzes European banks for T. Rowe Price. "The markets are really emotional right now."
The Dow Jones industrial average fell 115.42 points, or 1 percent, to 11,934.58. The Standard & Poor's 500 index fell 15.05, or 1.2 percent, to 1,268.45. The Nasdaq composite fell 33.86, or 1.3 percent, to 2,652.89.
The decline erased all of this week's gains for the Dow Jones industrial average and S&P index. The broad stock market has now fallen for seven of the last eight weeks, largely because of concerns that the U.S. economy is slowing and that Europe's debt problems may lead to another financial crisis. The S&P 500 is down 7 percent since it hit a high for the year on April 29.
Technology stocks were broadly lower. Micron Technology Inc. fell 14.5 percent after the company said lower sales of computer chips hurt its earnings, which were far less than analysts had expected. Oracle Corp. fell 4 percent after its sales of computer hardware fell sharply. Cisco Systems Inc. fell 3.5 percent, and Microsoft Corp. lost 1.3 percent.
Government bond prices rose to their highest level of the year as investors favored lower-risk assets. The yield on the 10-year Treasury dipped to 2.86 percent.
2) Tighter Lending Crimps Housing - From The Wall Street Journal
The percentage of mortgage applications rejected by the nation's largest lenders increased last year, spotlighting how banks' cautious lending practices are hampering the nascent housing market recovery.
In all, the nation's 10 largest mortgage lenders denied 26.8% of loan applications in 2010, an increase from 23.5% in 2009, according to an analysis by The Wall Street Journal of mortgage data filed with banking regulators.
Although lenders were expected to pull back from the freewheeling conditions that helped inflate the housing bubble, some economists argue they are now too conservative, and say that with the U.S. economy still wobbly, mortgages need to be easier to obtain for qualified borrowers, not harder.
"As the noose on credit availability tightens, credit is being choked off at a time when the housing market is extremely fragile," says Laurie Goodman, senior managing director at Amherst Securities Group LP.
Christopher Thornberg, a housing economist at Beacon Economics in Los Angeles, counters that "banks are doing what they need to do" to change lending standards in the wake of a "crazy bubble. "
He adds, "You had decades where credit standards were tougher than they are even now."
3)Why Austerity Doesn't Matter: Greece Is Still Going to Default-From CNBC
This is how quickly the European debt crisis devolves: Austerity, viewed by markets as saving grace for Greece just a day ago, has quickly moved into irrelevance as banks and insurers continue to find a path around default.
No doubt cutbacks are an integral part of the Greek future.
Violent street protests aside, the county’s financial standing simply won’t allow it to continue along the path of bloated government, massive public giveaways and the debt-on-top-of-debt strategy it has employed for too long.
But without some type of structural default on its current obligations, all the austerity in the world won’t make Greece’s problems go away.
“Greece and a number of other European countries cannot repay their debt. In fact they will never be able to repay their debt under current conditions because their economies are not competitive globally,” banking analyst Dick Bove at Rochdale Securities wrote in an analysis. “Therefore, these countries must, and in my judgment will, repudiate their debt.”
Indeed, looking at Greece’s onerous debt maturity schedule, it is almost impossible to imagine another alternative.
Starting with a 2.4 billion-euro repayment on July 15, Greece then has to pay, in euros: 900 million on July 19, 1.5 billion on July 20 and 1.6 billion on July 22. August doesn’t get much better, when the nation has a 1.6 billion-euro payment due on Aug. 19 and 9 billion euros due to the next day.
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