Dow Jones climbs out of the doldrums, mortgage stocks still volatile
Stock market players are hoping that Monday will be the start of a calmer week of trading. The Dow Jones Industrial Average closed at 11,269 on Friday, rising 125.71 points in the last day a period that saw the Dow plunge as much as 600 points after Standard & Poor's announced a downgrade to the U.S. sovereign debt rating. The big banks – Bank of America (BAC), Citigroup (C), Wells Fargo & Co. (WFC), and JPMorgan (JPM) — were still down at close on Friday, but not to the extent experienced earlier in the week. Bank of America's stock closed at $7.19 Friday, slightly under the $7.20 per share level reached on Monday after the bank's stock slumped 20%, becoming one of the largest casualties of a dramatic sell-off. Mortgage insurers also experienced a rocky ride, with The PMI Group (PMI) losing as much as 50% of its stock value last week, only to regain some traction seven days later. By Friday, the insurer's stock was down 5.85% from the previous day at 32 cents. Stocks generally risk delisting from major exchanges if they cannot maintain a minimum $1 share price over the long term. MGIC Investment Corp. (MTG) also was down more than 8% Friday, while Genworth Financial (GNW) fared better falling only a fraction of 1%. Insurer Radian (RDN) fell nearly 5% Friday, while Old Republic (ORI) was down nearly 2%. Mortgage insurers felt the pangs of the rocky week as well as general concerns about the insurers future in the overall mortgage finance space. The PMI Group's volatile swing in share price comes as the company received another downgrade from Standard & Poor's. Homebuilder stocks also got hammered during the roller coaster week with many trading at year lows. PulteGroup (PHM) hit a 52-week low of $4.09 on Thursday, but rebounded slightly on Friday to close at $4.52. D.R. Horton (DHI) also dipped to a 52-week low during the volatile week, hitting $8.90 on Tuesday before rebounding slightly later in the week. Beazer Homes (BZH) closed the week at $1.58 after reaching a 52-week low of $1.52 on Thursday. Mortgage real estate investment trusts were trading slightly up on Friday but it was a turbulent week, especially for American Capital Mortgage Investment Corp. (MTGE), which went public on Aug. 4, the first day the market took a wild swing south. Its shares dove on its opening day, falling 8.6% to $18.41 from the mortgage REIT’s $20 initial public offering price before rebounding. By Friday, it settled in at $19.53. Write to Kerri Panchuk.