Wall Street is worried that continued weakness in housing will crash the party for bank stocks, which have staged a surprising upturn following a better-than-expected start to earnings season.
New housing data Thursday showed that sales of existing homes dropped again in June and prices fell in nearly every region, indicating that tight credit and a moribund economy continue to weigh on the market. More numbers are due Friday that will measure the sales of new homes.
With analysts believing that both the stocks and the economy cannot recover until real estate regains its moorings, Wall Street saw its two-week rally come to an abrupt halt as banks shaved the dramatic gains they realized since last week.
The selloff put doubt on a belief that even if the broader market hasn’t shown a capitulation, financials at least have bottomed.
Click here to read the full article …
