(Updates to midday, changes byline)
By Caroline Valetkevitch
NEW YORK, Dec 28 (Reuters) - U.S. stocks edged lower on
Friday as weaker-than-expected data on new home sales
reinforced worries about the housing and mortgage markets.
Shares of home builders were down, and the Dow Jones home
construction index <.DJUSHB> fell 2.7 percent. An S&P index
index of financial stocks <.GSPF> was down 0.7 percent.
Stocks started the day in positive territory, but quickly
cut gains and eventually turned negative after a government
report showed U.S. new home sales fell much more than expected
in November, to the slowest sales pace in 12 years.
"This points to the fact that the housing market is in a
difficult situation. It's been a pretty consistent story
throughout the fourth quarter," said Owen Fitzpatrick, head of
the U.S. equity group at Deutsche Bank Private Wealth
Management in New York,
Shares of MBIA Inc <MBI.N> and other bond insurers fell on
news that billionaire investor Warren Buffett is starting up a
rival bond insurer that aims to make it cheaper for cities and
states to borrow.
The Dow Jones industrial average <.DJI> was down 51.38
points, or 0.39 percent, at 13,308.15. The Standard & Poor's
500 Index <.SPX> was down 3.95 points, or 0.27 percent, at
1,472.42. The Nasdaq Composite Index <.IXIC> was down 10.24
points, or 0.38 percent, at 2,666.55.
Trading volume remained well below normal levels, however,
because of the holidays.
Buffett's move comes as the credit ratings of major U.S.
bond insurers, including MBIA and a unit of Ambac Financial
<ABK.N>, look shaky. The start-up insurer, Hathaway Assurance
Corp, part of Buffett's Berkshire Hathaway Inc, was set to
begin operating on Friday in New York state.
Shares of MBIA plummeted 15.6 percent to $18.79.
(Additional reporting by Kristina Cooke;
Editing by Jan Paschal )
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Keywords: MARKETS STOCKS