Subprime Stock Shock

OK, it can't be a huge surprise that problems in the subprime market are affecting Wall Street.

Take a look (from http://today.reuters.com/news/articleinvesting.aspx?type=hotStocksNews&storyID=2007-03-13T193014Z_01_N12321904_RTRUKOC_0_US-MARKETS-STOCKS.xml&WTmodLoc=InvArt-C2-NextArticle-2):

U.S. stocks dropped sharply on Tuesday, pushing the Dow down more than 200 points in its second-biggest drop of the year, as mounting losses in the subprime mortgage sector and weak retail sales caused investors to sell riskier assets.

The New York Stock Exchange instituted trading curbs at 3:04 p.m. (1904 GMT) as stock selling accelerated.

The Mortgage Bankers Association reported late payments on mortgages and foreclosures on U.S. homes rose in the fourth quarter to their highest level in years. The trend was driven by subprime borrowers, who have weak credit.

Shares of financial services companies with exposure to the mortgage market were among the biggest decliners. Bank of America Corp. (BAC.N: Quote, Profile , Research) fell 2.9 percent to $49.62.

Also, General Motors Acceptance Corp., the former finance arm of General Motors Corp. (GM.N: Quote, Profile , Research), said it would receive another $1 billion from GM and warned it would be hit by pressure from a weakening market for U.S. mortgages.

Shares of GM dropped 2.8 percent to $30.44.