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The market is moving lower after key financial companies reported their Q-2 earnings


The stock market is not receiving news yet that financial stocks have hit the bottom as growing concerns over housing and the credit markets still linger.

Three of the worlds largest financial companies all within different fields, but heavily integrated into the mortgage and credit markets reported earnings results this week. AIG, the nations largest insurance company, and one of the worlds largest investors in mortgage backed securities reported a net loss in excess of five billion dollars for the second quarter of 2008. The company has been hit hard by the rapid fallout in the mortgage industry. Insurance companies typically take the premiums they receive for policy coverage and invest these into the marketplace hoping to earn a higher return to cover future payoffs and increase their profit margins.

AMBAC, one of the world larges bond insurance companies also reported earnings results this week. The company reported positive revenue for the second quarter of over seven hundred million dollars. This company is one of the worlds larges insurance providers for mortgage bonds and has seen it's stock price slide from $75 dollars to under $ 5 this year.

Freddie Mac, the second largest agency lender also reported earnings this week. The company reported a net loss over five hundred millions dollars for the second quarter. The company reduced its dividend from twenty five cents per share down to five cents and also indicated they would seek to raise an additional five billion dollars of capital in the near future.

Investors in all of these companies have seen their stock price slide significantly over the past twelve months. The stock market has shown signs of moving lower on the news and this is helping to bring down fixed mortgage rates as investors look for more stable investments.

8-7-2008 ? LoanNetwork.com





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