Copyright 2010 MarketWatch.com Inc.All Rights Reserved
February 23, 2010 Tuesday 4:21 PM EST
SECTION: NEWS & COMMENTARY; Markets; Financial Stocks
LENGTH: 425 words
HEADLINE: Financials post biggest loss in two weeks
BOSTON (MarketWatch) — U.S. financial stocks logged their worst performance in two weeks on Tuesday following a report showing U.S. consumer confidence took a steep dive in February.
The broader financial sector as measured by the Financial Select Sector SPDR Fund (XLF) fell 1.84%. American International Group Inc. (AIG) was among the biggest percentage decliners, losing 6%.
The Conference Board on Tuesday said consumer sentiment fell to its lowest level since April 2009 as Americans continued to worry about economic weakness and a slack labor market.
However, mortgage insurers hit hard by the pain in credit and housing markets saw their shares rise Tuesday after Radian Group Inc. reported a smaller-than-expected quarterly loss and said the rate of fresh delinquencies is slowing.
Radian (RDN) shares were up more than 10% after the company said its fourth-quarter loss narrowed to $1.12 a share, better than the $1.69-a-share loss predicted by analysts surveyed by Thomson Reuters.
The firm said it expects to have “excess liquidity” through 2012.
“Our results illustrate the challenging macroeconomic environment affecting our company,” said Chief Executive S.A. Ibrahim in the earnings release. “However, we are encouraged by signs of improvement in our mortgage insurance business, including a lower rate of new delinquencies, both sequentially and year-over-year, in a quarter that is traditionally prone to seasonal increases.”
Radian expects the level of delinquencies to “stabilize throughout 2010, and decrease by the end of 2010,” the CEO said.
Shares of mortgage and bond insurers such as PMI Group Inc. (PMI) , MGIC Investment Corp. (MTG) , Ambac Financial Group Inc. (ABK) and MBIA Inc. (MBI) were along for the ride and traded higher.
Investors were also digesting a report Tuesday showing national home prices dipped slightly in December from the previous month.
On the commercial side of the real estate market, Brookfield Asset Management Inc. (BAM) of Canada is preparing a bid to take a large stake in bankrupt mall giant General Growth Properties Inc. (GGWPQ) , The Wall Street Journal reported Tuesday. Brookfield is looking to best a recent bid from Simon Property Group Inc. (SPG) , the newspaper said. General Growth shares rose about 2%.
In banking news, Wall Street bonuses rose 17% to $20.3 billion last year, according to an estimate released Tuesday by New York State Comptroller Thomas DiNapoli.
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