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.
Bank of America's decision to throw Countrywide Financial a $2 billion lifeline is far more than BofA telling Countrywide 'here's some money, pay us back when you can'. Countrywide is paying dearly for the injection.
Shares of Thornburg Mortgage, Accredited Home Lenders Holding and other mortgage stocks were trading higher before the opening bell Thursday after Bank of America made a $2 billion investment in Countrywide Financial.
Moody's Investors Service said German state-owned Landesbanks were very rich in liquidity as a group and would not need to seek liquidity support either individually or as a group from a regional government.
Bank of America, said on Wednesday it would invest $2 billion in Countrywide Financial, helping shore up the finances at the largest U.S. mortgage lender, which has struggled with a liquidity crunch this month.
A late rally pushed U.S. stocks sharply higher at the close as takeover news and rate-cut speculation overshadowed jitters about tighter credit markets. "We think that liquidity is returning to the market after being problematic," said Kevin Cronin, head of investments at Putnam. "We think the Fed's actions last week righted the ship."
Accredited Home Lenders Holding said on Wednesday it had stopped taking mortgage applications and would eliminate 1,600 jobs, or 62 percent of its work force, to cope with turmoil in subprime lending.
Quality Home Loans, a subprime mortgage lender, has filed for Chapter 11 bankruptcy, joining at least a dozen other home loan providers to seek court protection this year as the U.S. housing market slumped.
A global credit squeeze has most economists convinced the Federal Reserve will come to the rescue and cut interest rates next month, a Reuters poll showed on Wednesday.
H&R Block said on Wednesday its Block Financial unit tapped working capital credit lines twice as a skittish market cuts off its access to short-term debt financing.
First Magnus Financial, one of the largest independent U.S. mortgage lenders, filed for Chapter 11 bankruptcy protection on Tuesday, the latest home loan provider to collapse as the housing market slumps and credit crisis widens.
Asian stocks were mostly higher in the morning session Wednesday with Japan the sole market pushing lower. Sentiment was lifted by a decent performance on Wall Street Tuesday, but markets are expected to stay in a narrow range as both buyers and sellers hesitate to make moves.
U.S. stocks ended mixed as the investors looked for signs that the Federal Reserve may cut interest rates again soon. "I think it's encouraging that we are kind of stabilizing after last week's turmoil," said Alec Young, equity market strategist at Standard & Poor's.
The following is the unofficial transcript of a CNBC interview with Treasury Secretary Henry Paulson on CNBC's "Squawk on the Street" today at 9:00 AM ET.
Treasury Secretary Henry Paulson attempted to soothe jittery investors on Tuesday, insisting the United States will safely get through a spreading credit crisis that has unhinged Wall Street.
Foreclosure filings rose 9 percent from June to July and surged 93 percent over the same period last year, with Nevada, Georgia and Michigan accounting for the highest foreclosure rates nationwide, a research firm said Tuesday.
U.S. stocks ended mixed but were well off the day's lows amid sustained credit market worries. "We're probably through the brunt of the volatility stage," said Keith Wirtz, chief investment officer at Fifth Third Asset Management.
The company ran ads meant to reassure customers after several armed with withdrawal slips descended on branches last Thursday and Friday, worried that their money was not safe even with Federal Deposit Insurance Corp. backing.
Investors may soon get what they are clamoring for: a cut in the benchmark federal funds rate. But they should be careful for what they wish for. Economists say that if the Fed cuts the overnight bank lending rate before a scheduled Sept. 18 meeting, it would result from the near-panic market conditions seen last week.