NEW YORK — U.S. stocks fell for the first time in six days after the nation's largest mortgage lender said the economy is heading for a recession.
Countrywide Financial Corp. Chief Executive Angelo Mozilo, speaking on the CNBC television network, said the housing slump may slow consumer spending and lead to an economic contraction
The market will likely be trading nervously "until we get some clarity from the Fed," said Jim Herrick, manager and director of equity trading at Baird & Co.
The Federal Reserve's moves to ease the market's credit concerns, including cash injections into the banking system and a lower discount lending rate to banks, have had some palliative
effect on Wall Street, evidenced by the ebbing of the extreme volatility of recent weeks. But Herrick said some may see this as a Band-Aid approach to a bigger problem.
"The big unknown is how widespread this problem is," Herrick said. "The Countrywide CEO's comments "probably didn't help" the market, he said. "They're the biggest lender in America."
The market showed little response Thursday to policymakers' infusion of another $17.25 billion into the banking system to help boost liquidity, adding to the $41.25 billion the central bank has injected since the beginning of last week.