LONDON (ShareCast) - More than 30 constituents of the S&P 500 suffered losses of 10% or more, as financial stocks and housebuilders were rattled by further evidence of a slump in the US housing market.

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.

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.

The Dow Jones industrial average closed down 283 at 11,349 while the broader based S&P 500 was 29 points lower at 1,252. The NASDAQ Composite fell 45 to 2,280.

Financial stocks featured heavily in the carnage, after Bill Gross, the highly respected manager of Pacific Investment Management Company (PIMCO) predicted that falling house prices would compel financial firms to write down $1,000bn from their balance sheets.

“The problem with writing off $1 trillion from the finance industry's cumulative balance sheet is that if not matched by capital raising, it necessitates a sale of assets, a reduction in lending or both that in turn begins to affect economic growth," Gross wrote in a commentary on PIMCO web site.

Market makers rushed to slash the prices of Fannie Mae, Freddie Mac, Lehman Brothers, Wachovia, Citigroup and a host of other lenders.

Housebuilders also saw their fair share of red ink, with Lennar losing almost a fifth of its value, while Pulte Homes and DR Horton both posted double-digit declines.

Car giant Ford added to the gloom, has shed around one-sixth 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 was down in sympathy.

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.

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
Qualcomm Incorporated (QCOM) $52.51 +17.16%
Radioshack Corp (RSH) $16.15 +15.19%
Amazon.Com, Inc. (AMZN) $79.12 +12.16%


S&P 500 - Fallers
M G I C Invest Cp (MTG) $5.51 -20.14%
Fannie Mae (FNM) $12.10 -19.33%
MEMC Electronic Materials (WFR) $43.82 -18.54%
Lennar Cp Cl A (LEN) $11.07 -18.24%
Freddie Mac (FRE) $8.89 -17.69%
Centex Cp (CTX) $13.06 -16.39%
Apt Inv & Mngmnt Co (AIV) $33.82 -16.29%
M B I A Inc (MBI) $5.44 -15.79%


Dow Jones I.A - Risers
Merck Co Inc (MRK) $32.51 +2.32%
International Business Machines (IBM) $130.50 +0.76%
Johnson and Johnson (JNJ) $68.66 +0.57%
3m Company (MMM) $71.05 +0.35%

Dow Jones I.A - Fallers
General Motors (GM) $13.09 -10.47%
Citigroup Inc (C) $19.20 -9.09%
Amer Intl Group Inc (AIG) $27.65 -8.14%
Bk Of America Cp (BAC) $30.80 -7.89%
American Express Inc (AXP) $36.41 -7.45%
JP Morgan Chase Co (JPM) $39.18 -6.63%

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