By Patrice Hill
The Washington Times
October 25, 2007
The fallout from the mortgage crunch worsened substantially yesterday, with single-family home sales plummeting to the lowest level since 1998 and Merrill Lynch reporting an unprecedented $7.9 billion write-down for bad loans — the latest in a weeklong series of setbacks for the economy and the markets.
The news drove down the Dow Jones Industrial Average by as much as 200 points, but the index regained all the ground it lost after economists said the dire straits facing financial and housing companies — and the unknown effect it will have on consumers — will prompt the Federal Reserve to cut interest rates again next week to rescue the faltering economy.
The news from Merrill Lynch — which reported the biggest quarterly loss in its 93 years of existence — was particularly “startling” and “staggering,” said Standard & Poor’s Corp., as the world’s largest brokerage had been considered healthy and relatively immune to the mortgage virus infecting other big banks on Wall Street.