China Construction Bank, one of the country's big four state lenders, said it held US$1.062 billion worth of U.S. subprime mortgage loan-backed securities at the end of June and expects the securities to have "limited impact" on its operating results for the year.
Stocks closed sharply higher after stronger-than-expected housing and durable goods data overshadowed lingering concerns about the credit markets. The Dow Jones Industrial Average had its best week since last April while the Nasdaq and the S&P 500 posted their best gains since late March
Stocks ended higher at the end of a quiet week of trading, as investors were encouraged by further moves by the Federal Reserve and a vote of confidence for the nation's largest mortgage lender. The Dow Jones Industrial Average posted a weekly gain of 1.8%, the S&P 500 rose 1.7% and the Nasdaq Composite advanced 2.1%.
Sales of new U.S. homes unexpectedly rose 2.8 percent to an 870,000 annual sales pacein July, reversing two months of declines, and inventories eased, a Commerce Department report showed on Friday. Despite the surprising strength, some economists said the housing outlook remains grim.
Subprime-battered mortgage lenders are shutting down, fewer homes are being built, and even some of the big U.S. retailers are planning conservatively for Christmas holiday sales.
European stocks finished the week in the green after stronger-than-expected U.S. durable goods orders and new home sales data on Friday pushed back fears of a spillover of the credit markets crisis to the wider economy.
The owners of stricken state lender SachsenLB aim to sell the German bank quickly after its near collapse under heavy losses from U.S. subprime mortgages and other risky debt, sources familiar with the matter said.
Until a few months ago, it seemed that anyone who could fog up a mirror could get a mortgage. Now, with a credit crisis roiling the industry, some consumers might think they have a better chance winning the lottery than finding a home loan.
The past two weeks have been nothing short of tumultuous for markets in Asia. Stocks first hurtled downwards faster than if you threw a boulder off a cliff. Then this week saw stocks rallying, with markets making back almost all of the losses suffered the week before. It's easy to make money in these situations. But for those who do not see volatility as a friend, investing in a fund with a long-term strategy may be more the thing for you.
BNP Paribas said on Thursday it would reopen next week three investment funds it had frozen this month amid subprime volatility in a step that may help restore investor confidence, which took a hit on their suspension.
Three of Asia's biggest banks, including state-run giant Bank of China, revealed bigger-than-expected exposure to the U.S. subprime mortgage crisis, sending their shares skidding on Friday.
DBS Group Holdings, Southeast Asia's biggest bank, said on Friday it has more direct exposure to collateralized debt obligations than previously declared, sending its shares down over 2%.
Shares in Bank of China and its subsidiary BOC Hong Kong slid on Friday amid worries that higher-than-expected exposure to sub-prime mortgages would eat into their earnings.
Investors in $5 billion of commercial paper, or short-term debt, from KKR Financial Holdings have hired a bankruptcy lawyer to advise them on a request to delay repayment, the Wall Street Journal reports.
U.S. stocks bounced off earlier lows but closed with small losses amid ongoing worries regarding the global credit environment. "The conventional logic was that the worst was behind us but then reality set in and there's still trouble out there," said Dan McMahon, head of listed trading at CIBC World Markets.
Banks have stepped up their borrowing from the Federal Reserve, a development encouraged by central bank policymakers to help stem a credit crunch that has roiled Wall Street.
Accredited Home Lenders Holding said on Thursday that Chief Financial Officer John Buchanan is resigning effective Aug. 31.
The unofficial transcript of a CNBC exclusive interview with Countrywide CEO Angelo Mozilo on CNBC's "The Call."
The chief executive of Countrywide Financial told CNBC that Bank of America's $2 billion investment in the struggling mortgage lender was a "priceless endorsement" for Countrywide but said the crisis in the housing and mortgage markets isn't getting any better.
A private equity-led buyout of home-improvement retailer Home Depot's wholesale supply division, due to close on Thursday, could be in trouble because investment banks involved are reluctant to fund the transaction even at a lower price, the Financial Times reported in its online edition, citing people familiar with the negotiations.