US stocks plummet on poor housing data

New York - Major US stock indices plunged Thursday as monthly housing sales dropped to their lowest level in 10 years and a major investor predicted a 1-trillion-dollar loss for the financial industry before the end of the mortgage crisis. Sales of previously owned homes dropped 2.6 per cent from May to a seasonally adjusted, annualized rate of 4.86 million units in June, more than 15 per cent below June 2007, the National Association of Realtors said. An index of construction stocks tumbled 12 per cent on the housing figures, its biggest-ever one-day drop, according to Bloomberg News. Bill Gross, who manages the world's largest bond fund, predicted that writedowns of mortgage-related assets could total 1 trillion dollars, more than double the losses incurred so far by financial institutions. Financial shares dropped 6.7 per... [read full story]