By Xinhua
New York : Wall Street plummeted amid rumours that the nation’s largest home loan lender Countrywide Financial Corporation was planning to file for bankruptcy protection.
The company had denied the rumour Tuesday, but its stock plunged 28 percent. Many traders have been betting recently that Countrywide might need to file for bankruptcy.
The New York Times reported that the financial entity had fabricated documents, spelling further trouble for the country’s biggest home loan provider.
The US National Association of Realtors posted its pending US home sales index Tuesday, which fell 2.6 percent in November, more than the market expected.
Although hopes remain high that the Federal Reserve will continue its campaign of rate cuts to prevent an economic recession, negative news on the day still dropped stocks down.
The Dow Jones industrial average fell 238.42 points, or 1.86 percent, to 12,589.07. Broader stock indicators also sank. The Standard & Poor’s 500 index dropped 25.99 points, or 1.84 percent, to 1,390.19, and the Nasdaq composite index declined 58.95 points, or 2.36 percent, to 2,440.51.