Stocks battered by mortgage mess
Dow falls over 150 points on news Wachovia will take a $1 billion hit, forecasts for slower growth in Europe.
NEW YORK (CNNMoney.com) -- Stocks sold off early Friday, continuing steep losses for the week as Wachovia became the latest bank hit by fallout in the mortgage sector.
The tech-fueled Nasdaq (Charts) slid over 2 percent.
In a filing with the Securities and Exchange Commission, Wachovia (Charts, Fortune 500) said the complex debt instruments it had in its portfolio declined in value by an estimated $1.1 billion pre-tax in October. The bank had reported $1.3 billion in pre-tax losses in the third quarter tied to pools of debt backed by home loans
The additional losses from Wachovia come after Citigroup (Charts, Fortune 500) said last week it expects to write down a further $8 billion to $11 billion in the fourth quarter due to credit- and mortgage-related problems.
Adding to investor woes was a weak growth forecast from the European Union, which said growth in the area of 27 nations is expected to slow to 2.4 percent next year and in 2009, down from 2.9 percent this year. The EU attributed weaker growth to problems stemming from the subprime mess in the U.S. and the rise in oil prices.
A bit of positive news: The U.S. trade deficit fell to the lowest level in 28 months as a falling dollar helped boost exports.
Oil prices eased in electronic trading. Light, sweet crude for December delivery slipped 6 cents to $95.40 a barrel.
The dollar fell to another record low versus the euro.