Weakness in financials -- particularly over concern that the equity in Fannie Mae and Freddie Mac could go to zero -- was the primary driver of today's activity.
Traders in tech stocks -- the market leader -- took advantage of the market weakness to lighten up on their positions.
Finally, even energy stocks saw a late-day selloff. The Amex Oil Index closed at a new low.
The housing news from southern California is illustrative of the elusive nature of this housing crisis: a little good news, but still mostly bad.
The good news, according to AP, is that bargain hunters are out: sales hit a 16-month high.
The bad news:
1) Prices keep dropping: to a median of $348,000, down from $355,000 in June and a peak of $505,000 in July 2007 (down 30 percent from peak);
2) Foreclosures were still huge, at 43.6 percent of all sales, up from 41.8 percent in June, and 7.9 percent in July 2007. Most of these distressed sales were in newer neighborhoods.
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