US shares decline on gloomy IMF report

29 July 2008

Stocks were hit yesterday, as the International Monetary Fund (IMF) indicated that house prices would continue to decline in the US.

The New York exchange dropped by over two per cent on the news, with financials leading the way down.

Insolvency declarations from two mortgage banks - the First National Bank of Nevada and the First Heritage Bank of California - also provoked negative sentiment, and exacerbated the day-long decline.

Investment bank Lehman Brothers fell eleven per cent, with Citi and Bank of America shares also losing eight per cent and five per cent of their values respectively.

At the close yesterday, the Down Jones industrial average had dropped by a total of 239 points to 11,131 - its lowest level since July 2006.

In its Global Financial Stability Report, the IMF declared that "a bottom for the housing market is not yet visible" and that the market "is still at the centre of…turmoil".

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