By Jeremy Lemer in New York
Published: May 8 2008 03:00
Wall Street stocks fell the most for a month yesterday after record high oil prices hurt consumer and transport stocks and financials tumbled on speculation that new regulations will force them to disclose further losses.
Bank and brokerage stocks slumped 3.7 per cent, their biggest one day fall since mid-March, after the Securities and Exchange Commission said it would require them to disclose capital and liquidity levels as early as this year to avoid the kind of damaging rumours that undermined Bear Stearns.
The news made a bad day on the equity markets worse. Housing related stocks were already reeling after a report from the National Association of Realtors, showed that fewer Americans signed contracts to buy previously owned homes in March, put off by falling prices and tighter credit.
That news stoked fears that the crisis in the housing sector has much further to run. Sales are down more than 20 per cent from a year ago and almost 35 per cent from their April 2005 peak.
“The string of unimpressive housing numbers continues,” said Mike Larson, a real estate analyst for Weiss Research. “There is a risk that many of these pending sales won’t turn into closed transactions, too, given the tightening in the mortgage lending market.”
Oil prices exacerbated the rout yesterday, dragging down equities as they stormed past $123 a barrel. Consumer discretionary stocks flipped from gains to losses on the prospect of an extended consumer spending slowdown and transport stocks took a hit.
