LONDON (ShareCast) - Further evidence of the slumping US housing market has shaken confidence, particularly among banks and mortgage lenders, while corporate news-flow was mixed..

Sales of existing homes fell 2.6% in June to an annualised rate of 4.86m, lower than the 4.95m that economists had been expecting. Lenders were marked lower in the aftermath of the housing data released, with Washington Mutual, Citigroup and JP Morgan the worst sufferers.

The sector was also rattled by pledges from San Diego City Attorney Michael Aguirre that he would follow up his legal case against Bank of America for “unfair predatory real estate lending” with similar cases against Washington Mutual, Wachovia, and Wells Fargo, according to reports on the Reuters new agency.

More bad news on the economy front came in the form of new jobless claims, which increased by a seasonally adjusted 34,000 to 406,000 last week, much bigger then analysts had predicted.

Oil prices also crept back up above $125 a barrel following their recent mauling on receding hurricane fears and easing of tensions in the Middle East.

The Dow Jones industrial average is down 123 at 11,508 while the broader based S&P 500 is 13 points lower at 1,268. The NASDAQ Composite falls 19 to 2,306.

Car giant Ford has shed around one-tenth of its value after it lost $8.67bn in the second quarter, as the value of its assets fell. The group said it will also cut jobs to reduce overall salaries by 15%. General Motors is down in sympathy.

Market makers bit a chunk out of burger chain McDonalds after Deutsche Bank cut its rating on the stock to “hold” from “buy”.

There was better news at Amazon though as the online retailer said late yesterday that second-quarter earnings more than doubled to $158m, beating analysts' expectations. Its shares are up over 12% today.

Chip-maker Qualcomm was wanted after it settled its long running dispute with Nokia over patents. Financial details of the deal were not disclosed but Nokia has agreed to pay upfront a “very substantial” amount to Qualcomm in royalties.

Elsewhere, drug makers Bristol-Myers and Eli Lilly both saw quarterly profits rise. Bristol-Myers beat expectations with an 8% rise in quarterly profit, while Eli Lilly reported a 44% increase in profit that narrowly missed forecasts.

S&P 500 - Risers
Radioshack Corp (RSH) $16.35 +16.62%
Qualcomm Incorporated (QCOM) $52.17 +16.40%
Amazon.Com, Inc. (AMZN) $81.15 +15.04%
Autonation Inc (AN) $10.61 +12.99%

S&P 500 - Fallers
Washington Mutual (WM) $3.67 -21.08%
MEMC Electronic Materials (WFR) $42.74 -20.55%
Teradyne Inc (TER) $9.11 -13.07%
Apt Inv & Mngmnt Co (AIV) $35.48 -12.18%

Dow Jones I.A - Risers
Merck Co Inc (MRK) $32.96 +3.75%
3m Company (MMM) $72.35 +2.19%

Dow Jones I.A - Fallers
General Motors (GM) $13.62 -6.84%
Boeing Co (BA) $62.31 -6.61%

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